In this article we will analyze whether First Citizens BancShares Inc. (NASDAQ:FCNCA) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
First Citizens BancShares Inc. (NASDAQ:FCNCA) was in 24 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 29. FCNCA has seen an increase in activity from the world’s largest hedge funds recently. There were 21 hedge funds in our database with FCNCA positions at the end of the second quarter. Our calculations also showed that FCNCA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
John Armitage of Egerton Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks 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. Now we’re going to take a look at the key hedge fund action regarding First Citizens BancShares Inc. (NASDAQ:FCNCA).
Do Hedge Funds Think FCNCA Is A Good Stock To Buy Now?
At third quarter’s end, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from the previous quarter. By comparison, 21 hedge funds held shares or bullish call options in FCNCA a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Among these funds, Egerton Capital Limited held the most valuable stake in First Citizens BancShares Inc. (NASDAQ:FCNCA), which was worth $228.7 million at the end of the third quarter. On the second spot was Southpoint Capital Advisors which amassed $113.8 million worth of shares. TOMS Capital, Miura Global Management, and Nitorum Capital 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 Miura Global Management allocated the biggest weight to First Citizens BancShares Inc. (NASDAQ:FCNCA), around 13.73% of its 13F portfolio. TOMS Capital is also relatively very bullish on the stock, dishing out 6.02 percent of its 13F equity portfolio to FCNCA.
Consequently, specific money managers have jumped into First Citizens BancShares Inc. (NASDAQ:FCNCA) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the biggest position in First Citizens BancShares Inc. (NASDAQ:FCNCA). Arrowstreet Capital had $2.4 million invested in the company at the end of the quarter. Sahm Adrangi’s Kerrisdale Capital also initiated a $1.8 million position during the quarter. The other funds with brand new FCNCA positions are Jinghua Yan’s TwinBeech Capital, Greg Eisner’s Engineers Gate Manager, and Michael Price’s MFP Investors.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as First Citizens BancShares Inc. (NASDAQ:FCNCA) but similarly valued. We will take a look at The New York Times Company (NYSE:NYT), Huaneng Power International Inc (NYSE:HNP), Vistra Corp. (NYSE:VST), Berry Global Group Inc (NYSE:BERY), Aspen Technology, Inc. (NASDAQ:AZPN), Zynga Inc (NASDAQ:ZNGA), and The Western Union Company (NYSE:WU). This group of stocks’ market values resemble FCNCA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NYT | 45 | 2431038 | -3 |
| HNP | 4 | 5801 | 0 |
| VST | 38 | 1221296 | 6 |
| BERY | 39 | 1245908 | 2 |
| AZPN | 20 | 620030 | -3 |
| ZNGA | 52 | 603900 | 3 |
| WU | 27 | 234768 | -4 |
| Average | 32.1 | 908963 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.1 hedge funds with bullish positions and the average amount invested in these stocks was $909 million. That figure was $820 million in FCNCA’s case. Zynga Inc (NASDAQ:ZNGA) is the most popular stock in this table. On the other hand Huaneng Power International Inc (NYSE:HNP) is the least popular one with only 4 bullish hedge fund positions. First Citizens BancShares Inc. (NASDAQ:FCNCA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FCNCA is 53.7. 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 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately FCNCA wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); FCNCA investors were disappointed as the stock returned -3.3% since the end of September (through 12/9) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
