We at Insider Monkey have gone over 866 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article, we look at what those funds think of Interpublic Group of Companies Inc (NYSE:IPG) based on that data.
Is Interpublic Group of Companies Inc (NYSE:IPG) worth your attention right now? Prominent investors were taking a bearish view. The number of bullish hedge fund positions shrunk by 9 lately. Interpublic Group of Companies Inc (NYSE:IPG) was in 29 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 38. Our calculations also showed that IPG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 38 hedge funds in our database with IPG positions at the end of the fourth quarter.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Peter Rathjens of Arrowstreet Capital
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. Keeping this in mind let’s take a gander at the fresh hedge fund action surrounding Interpublic Group of Companies Inc (NYSE:IPG).
Do Hedge Funds Think IPG 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 -24% from the previous quarter. By comparison, 21 hedge funds held shares or bullish call options in IPG a year ago. 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, Ariel Investments was the largest shareholder of Interpublic Group of Companies Inc (NYSE:IPG), with a stake worth $290.6 million reported as of the end of March. Trailing Ariel Investments was AQR Capital Management, which amassed a stake valued at $88.5 million. Junto Capital Management, Arrowstreet Capital, and GAMCO Investors 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 Ariel Investments allocated the biggest weight to Interpublic Group of Companies Inc (NYSE:IPG), around 2.86% of its 13F portfolio. Junto Capital Management is also relatively very bullish on the stock, earmarking 2.53 percent of its 13F equity portfolio to IPG.
Due to the fact that Interpublic Group of Companies Inc (NYSE:IPG) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there were a few money managers that decided to sell off their full holdings in the first quarter. It’s worth mentioning that Paul Marshall and Ian Wace’s Marshall Wace LLP dumped the biggest position of the 750 funds watched by Insider Monkey, totaling close to $15.7 million in stock, and Renaissance Technologies was right behind this move, as the fund cut about $7.4 million worth. These transactions are important to note, as total hedge fund interest dropped by 9 funds in the first quarter.
Let’s now review hedge fund activity in other stocks similar to Interpublic Group of Companies Inc (NYSE:IPG). These stocks are Avalara, Inc. (NYSE:AVLR), Allegion plc (NYSE:ALLE), Newell Brands Inc. (NYSE:NWL), LPL Financial Holdings Inc (NASDAQ:LPLA), Westlake Chemical Corporation (NYSE:WLK), Universal Health Services, Inc. (NYSE:UHS), and Lamb Weston Holdings, Inc. (NYSE:LW). All of these stocks’ market caps are similar to IPG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AVLR | 41 | 994280 | -15 |
| ALLE | 27 | 969085 | 0 |
| NWL | 24 | 1952399 | 1 |
| LPLA | 38 | 1496713 | -5 |
| WLK | 26 | 410629 | 4 |
| UHS | 43 | 882608 | 4 |
| LW | 38 | 493079 | 9 |
| Average | 33.9 | 1028399 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.9 hedge funds with bullish positions and the average amount invested in these stocks was $1028 million. That figure was $709 million in IPG’s case. Universal Health Services, Inc. (NYSE:UHS) is the most popular stock in this table. On the other hand Newell Brands Inc. (NYSE:NWL) is the least popular one with only 24 bullish hedge fund positions. Interpublic Group of Companies Inc (NYSE:IPG) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IPG is 32.1. 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. 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 by 6 percentage points. A small number of hedge funds were also right about betting on IPG, though not to the same extent, as the stock returned 14.1% since the end of Q1 (through July 2nd) and outperformed the market.
Follow Interpublic Group Of Companies Inc. (NYSE:IPG)
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Disclosure: None. This article was originally published at Insider Monkey.
