We can judge whether First Data Corp (NYSE:FDC) 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, research shows that these picks historically outperformed the market when we factor in known risk factors.
Is First Data Corp (NYSE:FDC) a bargain? The smart money is actually becoming hopeful. The number of bullish hedge fund positions that are disclosed in regulatory 13F filings improved by 3 recently. At the end of this article we will also compare FDC to other stocks including Cenovus Energy Inc (USA) (NYSE:CVE), Pembina Pipeline Corp (NYSE:PBA), and Ameren Corp (NYSE:AEE) to get a better sense of its popularity.
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What does the smart money think about First Data Corp (NYSE:FDC)?
At Q3’s end, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, a 9% rise from the previous quarter. The graph below displays the number of hedge funds with bullish position in FDC over the last 5 quarters, which shows a rapid ascent for the stock, which went public in Q4 2015. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Leon Cooperman’s Omega Advisors has the number one position in First Data Corp (NYSE:FDC), worth close to $170.5 million, amounting to 5.3% of its total 13F portfolio. On Omega Advisors’ heels is Brahman Capital, led by Peter Adam Hochfelder, holding a $152 million position; the fund has 5.3% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism comprise Larry Robbins’ Glenview Capital, Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management, and Richard Barrera’s Roystone Capital Partners. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
With general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Moore Global Investments, led by Louis Bacon, established the largest position in First Data Corp (NYSE:FDC). Moore Global Investments had $7.9 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners also made a $3.6 million investment in the stock during the quarter. The other funds with brand new FDC positions are Jim Simons’ Renaissance Technologies, Larry Foley and Paul Farrell’s Bronson Point Partners, and Benjamin A. Smith’s Laurion Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to First Data Corp (NYSE:FDC). These stocks are Cenovus Energy Inc (USA) (NYSE:CVE), Pembina Pipeline Corp (NYSE:PBA), Ameren Corp (NYSE:AEE), and Grupo Financero Sntdr Mxco SAB de CV ADR (NYSE:BSMX). This group of stocks’ market caps are similar to FDC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CVE | 20 | 364500 | -3 |
| PBA | 11 | 46092 | -1 |
| AEE | 12 | 432193 | -3 |
| BSMX | 9 | 24506 | 1 |
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $217 million. That figure was $661 million in FDC’s case. Cenovus Energy Inc (USA) (NYSE:CVE) is the most popular stock in this table. On the other hand Grupo Financero Sntdr Mxco SAB de CV ADR (NYSE:BSMX) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks First Data Corp (NYSE:FDC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
