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In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going even though the mainstream financial media journalists don’t agree with this approach. Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Fidelity National Information Services Inc. (NYSE:FIS).
Fidelity National Information Services Inc. (NYSE:FIS) has seen an increase in support from the world’s most elite money managers recently. FIS was in 105 hedge funds’ portfolios at the end of the fourth quarter of 2019. There were 95 hedge funds in our database with FIS positions at the end of the previous quarter. Our calculations also showed that FIS ranked 17th among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
If you listen to the mainstream financial media, you should avoid stock picking and invest in low-cost index funds. This is indeed what you should do if you want to generate average returns. Mainstream financial media journalists try to make you believe that it isn’t possible to pick winners and losers, and you should ignore the stock picks of hedge fund managers. You may remember reading an article in the WSJ that said “random dart throwing monkeys beat hedge fund stars”. What they fail to tell you is that the top 5 hedge fund stocks returned more than 30% since the end of 2018 and beat the S&P 500 Index by nearly 25 percentage points. You can’t explain this kind of outperformance by luck or coincidence. WSJ will need an army of monkeys to throw darts and tens of thousands of attempts to match these returns.
William Von Mueffling of Cantillon Capital Management
We leave no stone unturned when looking for the next great investment idea. For example, this trader is claiming triple digit returns, so we check out his latest trade recommendations. We are probably at the peak of the COVID-19 pandemic, so we check out this biotech investor’s coronavirus picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences (by the way watch this video. if you want to hear one of the best healthcare hedge fund manager’s coronavirus analysis). Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s analyze the key hedge fund action regarding Fidelity National Information Services Inc. (NYSE:FIS).
How have hedgies been trading Fidelity National Information Services Inc. (NYSE:FIS)?
Heading into the first quarter of 2020, a total of 105 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FIS over the last 18 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Citadel Investment Group held the most valuable stake in Fidelity National Information Services Inc. (NYSE:FIS), which was worth $704.8 million at the end of the third quarter. On the second spot was Cantillon Capital Management which amassed $565.1 million worth of shares. Farallon Capital, Melvin Capital Management, and Steadfast Capital Management 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 Caldera Capital allocated the biggest weight to Fidelity National Information Services Inc. (NYSE:FIS), around 19.98% of its 13F portfolio. BlueSpruce Investments is also relatively very bullish on the stock, setting aside 13.08 percent of its 13F equity portfolio to FIS.
As one would reasonably expect, some big names were breaking ground themselves. Alkeon Capital Management, managed by Panayotis Takis Sparaggis, created the most outsized position in Fidelity National Information Services Inc. (NYSE:FIS). Alkeon Capital Management had $108.5 million invested in the company at the end of the quarter. Andreas Halvorsen’s Viking Global also initiated a $77.2 million position during the quarter. The other funds with new positions in the stock are Daniel S. Och’s OZ Management, Mikal Patel’s Oribel Capital Management, and Michael Rockefeller and Karl Kroeker’s Woodline Partners.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Fidelity National Information Services Inc. (NYSE:FIS) but similarly valued. We will take a look at Sony Corporation (NYSE:SNE), Morgan Stanley (NYSE:MS), Gilead Sciences, Inc. (NASDAQ:GILD), and Caterpillar Inc. (NYSE:CAT). This group of stocks’ market values resemble FIS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SNE | 26 | 761509 | -1 |
| MS | 60 | 3846065 | -8 |
| GILD | 67 | 3722904 | 1 |
| CAT | 52 | 3227642 | 13 |
| Average | 51.25 | 2889530 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 51.25 hedge funds with bullish positions and the average amount invested in these stocks was $2890 million. That figure was $8074 million in FIS’s case. Gilead Sciences, Inc. (NASDAQ:GILD) is the most popular stock in this table. On the other hand Sony Corporation (NYSE:SNE) is the least popular one with only 26 bullish hedge fund positions. Compared to these stocks Fidelity National Information Services Inc. (NYSE:FIS) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 1.0% in 2020 through April 20th but still managed to beat the market by 11 percentage points. Hedge funds were also right about betting on FIS, though not to the same extent, as the stock returned -11.6% in 2020 (through April 20th) and outperformed the market as well.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
