Hedge Funds Are Dumping Invesco Ltd. (IVZ)

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Invesco Ltd. (NYSE:IVZ), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Invesco Ltd. (NYSE:IVZ) was in 27 hedge funds’ portfolios at the end of the third quarter of 2016. IVZ investors should pay attention to a decrease in enthusiasm from smart money in recent months. There were 34 hedge funds in our database with IVZ holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Vanguard Short Term Corporate Bond ETF (NASDAQ:VCSH), Mattel, Inc. (NASDAQ:MAT), and NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

ZIDO SUN/Shutterstock.com

How are hedge funds trading Invesco Ltd. (NYSE:IVZ)?

At the end of the third quarter, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 21% from one quarter earlier. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Richard S. Pzena’s Pzena Investment Management has the most valuable position in Invesco Ltd. (NYSE:IVZ), worth close to $78.9 million. The second largest stake is held by Citadel Investment Group, led by Ken Griffin, holding a $64.2 million position. Some other professional money managers that hold long positions include Paul Reeder and Edward Shapiro’s PAR Capital Management, Cliff Asness’ AQR Capital Management and Phill Gross and Robert Atchinson’s Adage Capital Management.

Due to the fact that Invesco Ltd. (NYSE:IVZ) has faced declining sentiment from the aggregate hedge fund industry, we can see that there exists a select few money managers that slashed their positions entirely by the end of the third quarter. Intriguingly, John Brennan’s Sirios Capital Management said goodbye to the biggest stake of the “upper crust” of funds monitored by Insider Monkey, worth close to $35.4 million in stock. Israel Englander’s fund, Millennium Management, also dumped its stock, about $8.3 million worth. These transactions are interesting, as total hedge fund interest dropped by 7 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Invesco Ltd. (NYSE:IVZ). We will take a look at Vanguard Short Term Corporate Bond ETF (NASDAQ:VCSH), Mattel, Inc. (NASDAQ:MAT), NASDAQ OMX Group, Inc. (NASDAQ:NDAQ), and C.H. Robinson Worldwide, Inc. (NASDAQ:CHRW). This group of stocks’ market values match IVZ’s market value.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $350 million. That figure was $397 million in IVZ’s case. Mattel, Inc. (NASDAQ:MAT) is the most popular stock in this table. On the other hand Vanguard Short Term Corporate Bond ETF (NASDAQ:VCSH) is the least popular one with only 6 bullish hedge fund positions. Invesco Ltd. (NYSE:IVZ) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MAT might be a better candidate to consider a long position in.

Disclosure: None