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 Franco-Nevada Corporation (NYSE:FNV).
Is Franco-Nevada Corporation (NYSE:FNV) going to take off soon? The best stock pickers were taking a bullish view. The number of long hedge fund positions improved by 3 lately. Franco-Nevada Corporation (NYSE:FNV) was in 23 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 31. Our calculations also showed that FNV isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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.
Eric Sprott of Sprott Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 look at the recent hedge fund action regarding Franco-Nevada Corporation (NYSE:FNV).
Do Hedge Funds Think FNV Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 15% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards FNV over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Franco-Nevada Corporation (NYSE:FNV), with a stake worth $633.9 million reported as of the end of June. Trailing Renaissance Technologies was Horizon Asset Management, which amassed a stake valued at $134 million. Citadel Investment Group, Sprott Asset Management, and D E Shaw 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 Beddow Capital Management allocated the biggest weight to Franco-Nevada Corporation (NYSE:FNV), around 4.09% of its 13F portfolio. Forest Hill Capital is also relatively very bullish on the stock, setting aside 3.53 percent of its 13F equity portfolio to FNV.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Moore Global Investments, managed by Louis Bacon, created the largest position in Franco-Nevada Corporation (NYSE:FNV). Moore Global Investments had $8.6 million invested in the company at the end of the quarter. Karim Abbadi and Edward McBride’s Centiva Capital also made a $1.9 million investment in the stock during the quarter. The other funds with brand new FNV positions are Israel Englander’s Millennium Management, Mika Toikka’s AlphaCrest Capital Management, and D. E. Shaw’s D E Shaw.
Let’s now review hedge fund activity in other stocks similar to Franco-Nevada Corporation (NYSE:FNV). These stocks are Delta Air Lines, Inc. (NYSE:DAL), Arista Networks Inc (NYSE:ANET), Eversource Energy (NYSE:ES), Interactive Brokers Group, Inc. (NASDAQ:IBKR), HubSpot Inc (NYSE:HUBS), Coca-Cola Europacific Partners PLC (NASDAQ:CCEP), and Deutsche Bank Aktiengesellschaft (NYSE:DB). This group of stocks’ market valuations resemble FNV’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DAL | 49 | 1218077 | -1 |
| ANET | 35 | 318271 | 9 |
| ES | 26 | 391290 | 2 |
| IBKR | 36 | 1481835 | 5 |
| HUBS | 54 | 2674601 | 8 |
| CCEP | 31 | 1300875 | 6 |
| DB | 20 | 1860258 | 4 |
| Average | 35.9 | 1320744 | 4.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.9 hedge funds with bullish positions and the average amount invested in these stocks was $1321 million. That figure was $959 million in FNV’s case. HubSpot Inc (NYSE:HUBS) is the most popular stock in this table. On the other hand Deutsche Bank Aktiengesellschaft (NYSE:DB) is the least popular one with only 20 bullish hedge fund positions. Franco-Nevada Corporation (NYSE:FNV) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FNV is 34.7. 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 24% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately FNV wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); FNV investors were disappointed as the stock returned -0.9% 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 Franco Nevada Corp (NYSE:FNV)
Follow Franco Nevada Corp (NYSE:FNV)
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Disclosure: None. This article was originally published at Insider Monkey.
