In this article we will check out the progression of hedge fund sentiment towards F.N.B. Corp (NYSE:FNB) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is F.N.B. Corp (NYSE:FNB) ready to rally soon? Money managers are betting on the stock. The number of long hedge fund bets increased by 1 recently. Our calculations also showed that FNB isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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. 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 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Donald Sussman of Paloma Partners
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a peek at the latest hedge fund action surrounding F.N.B. Corp (NYSE:FNB).
How are hedge funds trading F.N.B. Corp (NYSE:FNB)?
At the end of the first quarter, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FNB over the last 18 quarters. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the number one position in F.N.B. Corp (NYSE:FNB). Renaissance Technologies has a $27.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. The second largest stake is held by Citadel Investment Group, managed by Ken Griffin, which holds a $7.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions contain D. E. Shaw’s D E Shaw, Matthew Lindenbaum’s Basswood Capital and Emanuel J. Friedman’s EJF Capital. In terms of the portfolio weights assigned to each position EJF Capital allocated the biggest weight to F.N.B. Corp (NYSE:FNB), around 0.98% of its 13F portfolio. Basswood Capital is also relatively very bullish on the stock, setting aside 0.54 percent of its 13F equity portfolio to FNB.
With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. GLG Partners, managed by Noam Gottesman, created the largest position in F.N.B. Corp (NYSE:FNB). GLG Partners had $1.9 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $1.1 million investment in the stock during the quarter. The other funds with brand new FNB positions are John Overdeck and David Siegel’s Two Sigma Advisors, Greg Eisner’s Engineers Gate Manager, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as F.N.B. Corp (NYSE:FNB) but similarly valued. These stocks are Umpqua Holdings Corp (NASDAQ:UMPQ), TopBuild Corp (NYSE:BLD), LendingTree, Inc (NASDAQ:TREE), and Lattice Semiconductor Corporation (NASDAQ:LSCC). All of these stocks’ market caps match FNB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UMPQ | 23 | 183885 | 7 |
| BLD | 20 | 79991 | -9 |
| TREE | 21 | 74029 | -5 |
| LSCC | 26 | 531051 | -6 |
| Average | 22.5 | 217239 | -3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.5 hedge funds with bullish positions and the average amount invested in these stocks was $217 million. That figure was $64 million in FNB’s case. Lattice Semiconductor Corporation (NASDAQ:LSCC) is the most popular stock in this table. On the other hand TopBuild Corp (NYSE:BLD) is the least popular one with only 20 bullish hedge fund positions. F.N.B. Corp (NYSE:FNB) 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but beat the market by 14.2 percentage points. Unfortunately FNB wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on FNB were disappointed as the stock returned 14% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
