In this article we will take a look at whether hedge funds think First Citizens BancShares Inc. (NASDAQ:FCNCA) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
First Citizens BancShares Inc. (NASDAQ:FCNCA) has experienced an increase in activity from the world’s largest hedge funds in recent months. First Citizens BancShares Inc. (NASDAQ:FCNCA) was in 29 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic was previously 27. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that FCNCA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Chuck Royce of Royce & Associates
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Do Hedge Funds Think FCNCA Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from one quarter earlier. By comparison, 17 hedge funds held shares or bullish call options in FCNCA a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
More specifically, Miura Global Management was the largest shareholder of First Citizens BancShares Inc. (NASDAQ:FCNCA), with a stake worth $100.3 million reported as of the end of March. Trailing Miura Global Management was Southpoint Capital Advisors, which amassed a stake valued at $83.6 million. Nitorum Capital, Royce & Associates, and TOMS 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 17.91% of its 13F portfolio. Toscafund Asset Management is also relatively very bullish on the stock, earmarking 12.1 percent of its 13F equity portfolio to FCNCA.
As industrywide interest jumped, specific money managers were breaking ground themselves. Southpoint Capital Advisors, managed by John Smith Clark, established the biggest position in First Citizens BancShares Inc. (NASDAQ:FCNCA). Southpoint Capital Advisors had $83.6 million invested in the company at the end of the quarter. Benjamin Pass’s TOMS Capital also initiated a $60.9 million position during the quarter. The other funds with brand new FCNCA positions are Steve Cohen’s Point72 Asset Management, Jeffrey Tannenbaum’s Fir Tree, and Usman Waheed’s Strycker View Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as First Citizens BancShares Inc. (NASDAQ:FCNCA) but similarly valued. These stocks are Encompass Health Corporation (NYSE:EHC), Kimco Realty Corp (NYSE:KIM), Oshkosh Corporation (NYSE:OSK), Autoliv Inc. (NYSE:ALV), New Fortress Energy LLC (NASDAQ:NFE), CAE, Inc. (NYSE:CAE), and Pearson PLC (NYSE:PSO). This group of stocks’ market valuations match FCNCA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EHC | 36 | 836170 | 1 |
| KIM | 17 | 90007 | -5 |
| OSK | 26 | 416413 | -14 |
| ALV | 20 | 813218 | -6 |
| NFE | 12 | 30553 | 1 |
| CAE | 17 | 113000 | 7 |
| PSO | 6 | 19900 | 1 |
| Average | 19.1 | 331323 | -2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.1 hedge funds with bullish positions and the average amount invested in these stocks was $331 million. That figure was $607 million in FCNCA’s case. Encompass Health Corporation (NYSE:EHC) is the most popular stock in this table. On the other hand Pearson PLC (NYSE:PSO) is the least popular one with only 6 bullish hedge fund positions. First Citizens BancShares Inc. (NASDAQ:FCNCA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FCNCA is 75.3. 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 positive signal but 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 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately FCNCA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FCNCA were disappointed as the stock returned -2.2% since the end of March (through 7/2) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
