Hedge Funds Are Selling Intuit Inc. (INTU)

The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Intuit Inc. (NASDAQ:INTU).

Intuit Inc. (NASDAQ:INTU) was in 26 hedge funds’ portfolios at the end of September. INTU investors should be aware of a decrease in hedge fund interest recently. There were 28 hedge funds in our database with INTU 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 Vale SA (ADR) (NYSE:VALE), Prologis Inc (NYSE:PLD), and Waste Management, Inc. (NYSE:WM) 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.

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How are hedge funds trading Intuit Inc. (NASDAQ:INTU)?

Heading into the fourth quarter of 2016, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a fall of 7% from the previous quarter. The graph below displays the number of hedge funds with bullish position in INTU over the last 5 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, David Blood and Al Gore’s Generation Investment Management has the most valuable position in Intuit Inc. (NASDAQ:INTU), worth close to $124.9 million, amounting to 1.4% of its total 13F portfolio. On Generation Investment Management’s heels is AQR Capital Management, led by Cliff Asness, holding a $89.1 million position. Some other hedge funds and institutional investors that hold long positions comprise John Overdeck and David Siegel’s Two Sigma Advisors, Paul Marshall and Ian Wace’s Marshall Wace LLP and Jim Simons’ Renaissance Technologies. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Judging by the fact that Intuit Inc. (NASDAQ:INTU) has sustained bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few hedge funds that slashed their full holdings in the third quarter. Intriguingly, Ken Griffin’s Citadel Investment Group said goodbye to the largest stake of all the investors tracked by Insider Monkey, worth about $9.1 million in call options, and Solomon Kumin’s Folger Hill Asset Management was right behind this move, as the fund said goodbye to about $7.2 million worth of shares.

Let’s now review hedge fund activity in other stocks similar to Intuit Inc. (NASDAQ:INTU). We will take a look at Vale SA (ADR) (NYSE:VALE), Prologis Inc (NYSE:PLD), Waste Management, Inc. (NYSE:WM), and The Kroger Co. (NYSE:KR). This group of stocks’ market valuations are similar to INTU’s market valuation.

As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $987 million. That figure was $697 million in INTU’s case. The Kroger Co. (NYSE:KR) is the most popular stock in this table. On the other hand Prologis Inc (NYSE:PLD) is the least popular one with only 17 bullish hedge fund positions. Intuit Inc. (NASDAQ:INTU) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard KR might be a better candidate to consider taking a long position in.

Disclosure: None