We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 835 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2019. What do these smart investors think about Stifel Financial Corp. (NYSE:SF)?
Stifel Financial Corp. (NYSE:SF) has experienced an increase in activity from the world’s largest hedge funds lately. Our calculations also showed that SF isn’t 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).
In the financial world there are tons of metrics stock traders have at their disposal to appraise stocks. Two of the most under-the-radar metrics are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the elite fund managers can outclass their index-focused peers by a very impressive amount (see the details here).
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. 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. With all of this in mind we’re going to take a peek at the key hedge fund action encompassing Stifel Financial Corp. (NYSE:SF).
What does smart money think about Stifel Financial Corp. (NYSE:SF)?
Heading into the first quarter of 2020, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in SF a year ago. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
More specifically, Fisher Asset Management was the largest shareholder of Stifel Financial Corp. (NYSE:SF), with a stake worth $81.5 million reported as of the end of September. Trailing Fisher Asset Management was AQR Capital Management, which amassed a stake valued at $21.9 million. GLG Partners, Arrowstreet Capital, and Marshall Wace LLP 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 Sciencast Management allocated the biggest weight to Stifel Financial Corp. (NYSE:SF), around 0.09% of its 13F portfolio. Fisher Asset Management is also relatively very bullish on the stock, setting aside 0.08 percent of its 13F equity portfolio to SF.
As aggregate interest increased, key money managers were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the largest position in Stifel Financial Corp. (NYSE:SF). Marshall Wace LLP had $4.5 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also initiated a $0.7 million position during the quarter. The following funds were also among the new SF investors: Qing Li’s Sciencast Management and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Stifel Financial Corp. (NYSE:SF) but similarly valued. We will take a look at F.N.B. Corp (NYSE:FNB), B2Gold Corp (NYSE:BTG), Thor Industries, Inc. (NYSE:THO), and Murphy Oil Corporation (NYSE:MUR). This group of stocks’ market valuations match SF’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FNB | 23 | 124299 | 4 |
| BTG | 17 | 242934 | 3 |
| THO | 30 | 247356 | 0 |
| MUR | 24 | 161932 | 6 |
| Average | 23.5 | 194130 | 3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.5 hedge funds with bullish positions and the average amount invested in these stocks was $194 million. That figure was $149 million in SF’s case. Thor Industries, Inc. (NYSE:THO) is the most popular stock in this table. On the other hand B2Gold Corp (NYSE:BTG) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Stifel Financial Corp. (NYSE:SF) is even less popular than BTG. Hedge funds dodged a bullet by taking a bearish stance towards SF. Our calculations showed that the top 20 most popular hedge fund stocks returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but managed to beat the market by 5.5 percentage points. Unfortunately SF wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); SF investors were disappointed as the stock returned -32.6% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in Q1.
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.
