The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 873 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th. In this article we look at what those investors think of Genworth Financial Inc (NYSE:GNW).
Is Genworth Financial Inc (NYSE:GNW) the right pick for your portfolio? The smart money was turning less bullish. The number of bullish hedge fund bets decreased by 4 in recent months. Genworth Financial Inc (NYSE:GNW) was in 20 hedge funds’ portfolios at the end of June. The all time high for this statistic is 38. Our calculations also showed that GNW isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the eyes of most investors, hedge funds are perceived as slow, outdated investment vehicles of the past. While there are greater than 8000 funds with their doors open at present, We look at the masters of this group, approximately 850 funds. It is estimated that this group of investors manage the majority of the hedge fund industry’s total asset base, and by tracking their top stock picks, Insider Monkey has found a few investment strategies that have historically beaten Mr. Market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Joel Greenblatt of Gotham Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, plant based food market is expected to explode 100-fold by 2050, so we are checking out this under-the-radar stock. We go through lists like the 10 best growth stocks to buy 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to take a look at the fresh hedge fund action regarding Genworth Financial Inc (NYSE:GNW).
Do Hedge Funds Think GNW Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards GNW over the last 24 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
The largest stake in Genworth Financial Inc (NYSE:GNW) was held by Shah Capital Management, which reported holding $39.1 million worth of stock at the end of June. It was followed by D E Shaw with a $31 million position. Other investors bullish on the company included Arrowstreet Capital, Millennium Management, and Sonic Capital. In terms of the portfolio weights assigned to each position Shah Capital Management allocated the biggest weight to Genworth Financial Inc (NYSE:GNW), around 11.04% of its 13F portfolio. Sonic Capital is also relatively very bullish on the stock, designating 7.35 percent of its 13F equity portfolio to GNW.
Judging by the fact that Genworth Financial Inc (NYSE:GNW) has witnessed a decline in interest from the entirety of the hedge funds we track, we can see that there were a few funds who sold off their full holdings by the end of the second quarter. Intriguingly, Matthew Halbower’s Pentwater Capital Management dropped the largest investment of all the hedgies watched by Insider Monkey, totaling an estimated $3.6 million in stock, and Andre F. Perold’s HighVista Strategies was right behind this move, as the fund dropped about $1.9 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 4 funds by the end of the second quarter.
Let’s also examine hedge fund activity in other stocks similar to Genworth Financial Inc (NYSE:GNW). These stocks are Atlas Air Worldwide Holdings, Inc. (NASDAQ:AAWW), McGrath RentCorp (NASDAQ:MGRC), Hercules Capital Inc (NYSE:HTGC), Kaiser Aluminum Corp. (NASDAQ:KALU), Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY), Lordstown Motors Corp. (NASDAQ:RIDE), and Trustmark Corp (NASDAQ:TRMK). This group of stocks’ market values are similar to GNW’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AAWW | 26 | 344696 | -3 |
| MGRC | 15 | 84697 | 2 |
| HTGC | 16 | 57724 | 6 |
| KALU | 10 | 65989 | -3 |
| PLAY | 28 | 408648 | 4 |
| RIDE | 12 | 27117 | 0 |
| TRMK | 10 | 13769 | 3 |
| Average | 16.7 | 143234 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.7 hedge funds with bullish positions and the average amount invested in these stocks was $143 million. That figure was $168 million in GNW’s case. Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY) is the most popular stock in this table. On the other hand Kaiser Aluminum Corp. (NASDAQ:KALU) is the least popular one with only 10 bullish hedge fund positions. Genworth Financial Inc (NYSE:GNW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GNW is 44.6. 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. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on GNW as the stock returned 14.9% since the end of Q2 (through 10/22) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Genworth Financial Inc (NYSE:GNW)
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Disclosure: None. This article was originally published at Insider Monkey.
