In this article we will check out the progression of hedge fund sentiment towards Stellantis N.V. (NYSE:STLA) 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 Stellantis N.V. (NYSE:STLA) an outstanding investment now? Hedge funds were turning less bullish. The number of bullish hedge fund positions dropped by 4 lately. Stellantis N.V. (NYSE:STLA) was in 24 hedge funds’ portfolios at the end of September. The all time high for this statistic is 36. Our calculations also showed that STLA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 28 hedge funds in our database with STLA positions at the end of the second quarter.
Donald Sussman of Paloma Partners
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. With all of this in mind let’s take a peek at the fresh hedge fund action regarding Stellantis N.V. (NYSE:STLA).
Do Hedge Funds Think STLA Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from the previous quarter. By comparison, 20 hedge funds held shares or bullish call options in STLA 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.
Among these funds, Arrowstreet Capital held the most valuable stake in Stellantis N.V. (NYSE:STLA), which was worth $857.1 million at the end of the third quarter. On the second spot was Two Sigma Advisors which amassed $105.2 million worth of shares. Rokos Capital Management, Adage Capital Management, and Ancient Art (Teton Capital) were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Odey Asset Management Group allocated the biggest weight to Stellantis N.V. (NYSE:STLA), around 8% of its 13F portfolio. DSAM Partners is also relatively very bullish on the stock, earmarking 7.03 percent of its 13F equity portfolio to STLA.
Because Stellantis N.V. (NYSE:STLA) has faced declining sentiment from the smart money, it’s safe to say that there was a specific group of hedgies that elected to cut their full holdings by the end of the third quarter. It’s worth mentioning that Ken Heebner’s Capital Growth Management dropped the largest investment of the 750 funds followed by Insider Monkey, valued at close to $17.7 million in stock. Jeffrey Altman’s fund, Owl Creek Asset Management, also dumped its stock, about $12.5 million worth. These moves are interesting, as total hedge fund interest dropped by 4 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Stellantis N.V. (NYSE:STLA). We will take a look at Ecolab Inc. (NYSE:ECL), Eaton Corporation plc (NYSE:ETN), Norfolk Southern Corp. (NYSE:NSC), Dominion Energy Inc. (NYSE:D), America Movil SAB de CV (NYSE:AMX), NIO Inc. (NYSE:NIO), and FedEx Corporation (NYSE:FDX). This group of stocks’ market values match STLA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ECL | 39 | 2551887 | -9 |
| ETN | 45 | 1089775 | 5 |
| NSC | 46 | 1049404 | -12 |
| D | 27 | 545194 | -7 |
| AMX | 11 | 167723 | -2 |
| NIO | 30 | 1138194 | -4 |
| FDX | 49 | 1682204 | -12 |
| Average | 35.3 | 1174912 | -5.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.3 hedge funds with bullish positions and the average amount invested in these stocks was $1175 million. That figure was $1179 million in STLA’s case. FedEx Corporation (NYSE:FDX) is the most popular stock in this table. On the other hand America Movil SAB de CV (NYSE:AMX) is the least popular one with only 11 bullish hedge fund positions. Stellantis N.V. (NYSE:STLA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for STLA is 38.1. 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 STLA wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); STLA investors were disappointed as the stock returned -3.2% 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.
Follow Stellantis N.v. (NYSE:STLA)
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Disclosure: None. This article was originally published at Insider Monkey.
