Hedge Funds Are Dumping M&T Bank Corporation (MTB)

Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards M&T Bank Corporation (NYSE:MTB).

M&T Bank Corporation (NYSE:MTB) was in 27 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 46. MTB has experienced a decrease in activity from the world’s largest hedge funds of late. There were 46 hedge funds in our database with MTB positions at the end of the second quarter. Our calculations also showed that MTB 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. Now we’re going to check out the fresh hedge fund action regarding M&T Bank Corporation (NYSE:MTB).

Bernard Horn of Polaris Capital Management

Do Hedge Funds Think MTB Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of -41% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards MTB over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in M&T Bank Corporation (NYSE:MTB) was held by Citadel Investment Group, which reported holding $249.1 million worth of stock at the end of September. It was followed by Adage Capital Management with a $137.9 million position. Other investors bullish on the company included LMR Partners, AQR Capital Management, and Polaris Capital Management. In terms of the portfolio weights assigned to each position Prana Capital Management allocated the biggest weight to M&T Bank Corporation (NYSE:MTB), around 3.42% of its 13F portfolio. Azora Capital is also relatively very bullish on the stock, dishing out 3.3 percent of its 13F equity portfolio to MTB.

Judging by the fact that M&T Bank Corporation (NYSE:MTB) has faced declining sentiment from the aggregate hedge fund industry, logic holds that there is a sect of hedge funds who were dropping their entire stakes by the end of the third quarter. Intriguingly, Robert Joseph Caruso’s Select Equity Group dropped the biggest investment of the 750 funds monitored by Insider Monkey, comprising about $22.8 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also sold off its stock, about $13.6 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 19 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as M&T Bank Corporation (NYSE:MTB) but similarly valued. These stocks are Asana Inc. (NYSE:ASAN), PG&E Corporation (NYSE:PCG), Bio-Techne Corporation (NASDAQ:TECH), Raymond James Financial, Inc. (NYSE:RJF), Burlington Stores Inc (NYSE:BURL), Restaurant Brands International Inc (NYSE:QSR), and Avangrid, Inc. (NYSE:AGR). All of these stocks’ market caps resemble MTB’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.6 hedge funds with bullish positions and the average amount invested in these stocks was $1404 million. That figure was $774 million in MTB’s case. PG&E Corporation (NYSE:PCG) is the most popular stock in this table. On the other hand Avangrid, Inc. (NYSE:AGR) is the least popular one with only 9 bullish hedge fund positions. M&T Bank Corporation (NYSE:MTB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MTB is 23.6. 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 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately MTB wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); MTB investors were disappointed as the stock returned 2.7% 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 most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.