Is Fifth Third Bancorp (NASDAQ:FITB) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Fifth Third Bancorp (NASDAQ:FITB) has experienced a decrease in enthusiasm from smart money in recent months. Fifth Third Bancorp (NASDAQ:FITB) was in 28 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 43. Our calculations also showed that FITB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind we’re going to take a gander at the latest hedge fund action regarding Fifth Third Bancorp (NASDAQ:FITB).
Richard S. Pzena of Pzena Investment Management
Do Hedge Funds Think FITB Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -32% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in FITB over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Pzena Investment Management held the most valuable stake in Fifth Third Bancorp (NASDAQ:FITB), which was worth $64.5 million at the end of the third quarter. On the second spot was Adage Capital Management which amassed $59.3 million worth of shares. Holocene Advisors, Schonfeld Strategic Advisors, and Hourglass 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 Hourglass Capital allocated the biggest weight to Fifth Third Bancorp (NASDAQ:FITB), around 3.78% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, dishing out 0.76 percent of its 13F equity portfolio to FITB.
Due to the fact that Fifth Third Bancorp (NASDAQ:FITB) has witnessed declining sentiment from the smart money, it’s easy to see that there lies a certain “tier” of funds that elected to cut their full holdings in the third quarter. Interestingly, Steve Cohen’s Point72 Asset Management sold off the biggest investment of all the hedgies followed by Insider Monkey, worth an estimated $20.5 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund sold off about $6.4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 13 funds in the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Fifth Third Bancorp (NASDAQ:FITB) but similarly valued. These stocks are Alexandria Real Estate Equities Inc (NYSE:ARE), MPLX LP (NYSE:MPLX), Carnival Corporation & plc (NYSE:CCL), Nucor Corporation (NYSE:NUE), Valero Energy Corporation (NYSE:VLO), Orange SA (NYSE:ORAN), and Tyson Foods, Inc. (NYSE:TSN). This group of stocks’ market values are closest to FITB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ARE | 26 | 489883 | -2 |
| MPLX | 8 | 90948 | -3 |
| CCL | 36 | 520667 | 5 |
| NUE | 25 | 199344 | -7 |
| VLO | 32 | 289108 | -6 |
| ORAN | 3 | 20523 | 0 |
| TSN | 33 | 865195 | 0 |
| Average | 23.3 | 353667 | -1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.3 hedge funds with bullish positions and the average amount invested in these stocks was $354 million. That figure was $284 million in FITB’s case. Carnival Corporation & plc (NYSE:CCL) is the most popular stock in this table. On the other hand Orange SA (NYSE:ORAN) is the least popular one with only 3 bullish hedge fund positions. Fifth Third Bancorp (NASDAQ:FITB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FITB is 49.4. 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately FITB wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FITB were disappointed as the stock returned 3.1% since the end of September (through 12/9) 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.
