Is SVB Financial Group (NASDAQ:SIVB) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
SVB Financial Group (NASDAQ:SIVB) shareholders have witnessed a decrease in enthusiasm from smart money recently. SVB Financial Group (NASDAQ:SIVB) was in 45 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 49. There were 49 hedge funds in our database with SIVB positions at the end of the second quarter. Our calculations also showed that SIVB isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Ken Griffin of Citadel Investment Group
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 let’s check out the fresh hedge fund action regarding SVB Financial Group (NASDAQ:SIVB).
Do Hedge Funds Think SIVB Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 45 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from one quarter earlier. By comparison, 27 hedge funds held shares or bullish call options in SIVB a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in SVB Financial Group (NASDAQ:SIVB) was held by Fisher Asset Management, which reported holding $415 million worth of stock at the end of September. It was followed by AQR Capital Management with a $125.9 million position. Other investors bullish on the company included Citadel Investment Group, PEAK6 Capital Management, and Adage Capital Management. In terms of the portfolio weights assigned to each position EJF Capital allocated the biggest weight to SVB Financial Group (NASDAQ:SIVB), around 4.01% of its 13F portfolio. Second Curve Capital is also relatively very bullish on the stock, designating 2.81 percent of its 13F equity portfolio to SIVB.
Because SVB Financial Group (NASDAQ:SIVB) has witnessed declining sentiment from hedge fund managers, it’s safe to say that there were a few hedgies that slashed their entire stakes last quarter. It’s worth mentioning that Matthew Stadelman’s Diamond Hill Capital cut the biggest stake of the “upper crust” of funds monitored by Insider Monkey, worth an estimated $120.7 million in stock. James Parsons’s fund, Junto Capital Management, also cut its stock, about $34.6 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 4 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to SVB Financial Group (NASDAQ:SIVB). These stocks are Travelers Companies Inc (NYSE:TRV), Kinder Morgan Inc (NYSE:KMI), The Allstate Corporation (NYSE:ALL), DiDi Global Inc. (NYSE:DIDI), Manulife Financial Corporation (NYSE:MFC), Xilinx, Inc. (NASDAQ:XLNX), and Telefonaktiebolaget LM Ericsson (publ) (NASDAQ:ERIC). All of these stocks’ market caps resemble SIVB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TRV | 32 | 433119 | -2 |
| KMI | 43 | 1012275 | 5 |
| ALL | 27 | 821166 | -6 |
| DIDI | 15 | 701653 | 15 |
| MFC | 18 | 351002 | 0 |
| XLNX | 62 | 4541236 | 3 |
| ERIC | 21 | 227446 | 2 |
| Average | 31.1 | 1155414 | 2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.1 hedge funds with bullish positions and the average amount invested in these stocks was $1155 million. That figure was $1207 million in SIVB’s case. Xilinx, Inc. (NASDAQ:XLNX) is the most popular stock in this table. On the other hand DiDi Global Inc. (NYSE:DIDI) is the least popular one with only 15 bullish hedge fund positions. SVB Financial Group (NASDAQ:SIVB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SIVB is 60.5. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on SIVB as the stock returned 7% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
