A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on Visteon Corp (NASDAQ:VC).
Hedge fund interest in Visteon Corp (NASDAQ:VC) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that VC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Relay Therapeutics, Inc. (NASDAQ:RLAY), Emergent Biosolutions Inc (NYSE:EBS), and SmileDirectClub, Inc. (NASDAQ:SDC) to gather more data points.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, plant based food market is expected to explode 100-fold by 2050, so we are checking out this under-the-radar stock. We go through lists like the 10 best growth stocks to buy to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a peek at the fresh hedge fund action regarding Visteon Corp (NASDAQ:VC).
Do Hedge Funds Think VC Is A Good Stock To Buy Now?
At the end of June, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. By comparison, 23 hedge funds held shares or bullish call options in VC a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Iridian Asset Management held the most valuable stake in Visteon Corp (NASDAQ:VC), which was worth $65.7 million at the end of the second quarter. On the second spot was Citadel Investment Group which amassed $21.1 million worth of shares. Private Capital Management, Driehaus Capital, and Moore Global Investments were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Private Capital Management allocated the biggest weight to Visteon Corp (NASDAQ:VC), around 2.57% of its 13F portfolio. Iridian Asset Management is also relatively very bullish on the stock, setting aside 1.15 percent of its 13F equity portfolio to VC.
Because Visteon Corp (NASDAQ:VC) has faced falling interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedge funds who sold off their full holdings by the end of the second quarter. Intriguingly, Phill Gross and Robert Atchinson’s Adage Capital Management dumped the biggest stake of the “upper crust” of funds watched by Insider Monkey, worth about $10.5 million in stock. Alec Litowitz and Ross Laser’s fund, Magnetar Capital, also cut its stock, about $1.2 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Visteon Corp (NASDAQ:VC). These stocks are Relay Therapeutics, Inc. (NASDAQ:RLAY), Emergent Biosolutions Inc (NYSE:EBS), SmileDirectClub, Inc. (NASDAQ:SDC), Karuna Therapeutics, Inc. (NASDAQ:KRTX), Macquarie Infrastructure Holdings, LLC (NYSE:MIC), John Wiley & Sons Inc (NYSE:JW), and Federated Hermes, Inc. (NYSE:FHI). This group of stocks’ market values resemble VC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RLAY | 17 | 658614 | -3 |
| EBS | 15 | 124614 | 2 |
| SDC | 19 | 135469 | -2 |
| KRTX | 18 | 366239 | -5 |
| MIC | 34 | 435659 | 1 |
| JW | 16 | 171399 | 0 |
| FHI | 25 | 223777 | -2 |
| Average | 20.6 | 302253 | -1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.6 hedge funds with bullish positions and the average amount invested in these stocks was $302 million. That figure was $176 million in VC’s case. Macquarie Infrastructure Holdings, LLC (NYSE:MIC) is the most popular stock in this table. On the other hand Emergent Biosolutions Inc (NYSE:EBS) is the least popular one with only 15 bullish hedge fund positions. Visteon Corp (NASDAQ:VC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for VC is 28.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately VC wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); VC investors were disappointed as the stock returned -13.6% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Visteon Corp (NYSE:VC)
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Disclosure: None. This article was originally published at Insider Monkey.
