The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 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, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Visteon Corp (NASDAQ:VC) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Visteon Corp (NASDAQ:VC) has experienced an increase in activity from the world’s largest hedge funds of late. Visteon Corp (NYSE:VC) was in 23 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 56. Our calculations also showed that VC isn’t among the 30 most popular stocks among hedge funds (click for Q2 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.
In the eyes of most market participants, hedge funds are perceived as underperforming, old investment vehicles of the past. While there are over 8000 funds trading at the moment, We choose to focus on the elite of this group, around 850 funds. It is estimated that this group of investors control the majority of the smart money’s total capital, and by keeping an eye on their unrivaled stock picks, Insider Monkey has unearthed various investment strategies that have historically exceeded the market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Harold Levy of Iridian Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this lithium company which could also benefit from the electric car adoption. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. With all of this in mind we’re going to take a glance at the recent hedge fund action regarding Visteon Corp (NASDAQ:VC).
Hedge fund activity in Visteon Corp (NASDAQ:VC)
At Q2’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 21% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards VC over the last 20 quarters. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Iridian Asset Management, managed by David Cohen and Harold Levy, holds the largest position in Visteon Corp (NASDAQ:VC). Iridian Asset Management has a $57.4 million position in the stock, comprising 1.3% of its 13F portfolio. The second most bullish fund manager is Columbus Circle Investors, managed by Principal Global Investors, which holds a $39.7 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish contain Phill Gross and Robert Atchinson’s Adage Capital Management, Paul Marshall and Ian Wace’s Marshall Wace LLP and Gregg J. Powers’s Private Capital Management. In terms of the portfolio weights assigned to each position Private Capital Management allocated the biggest weight to Visteon Corp (NASDAQ:VC), around 3.64% of its 13F portfolio. Columbus Circle Investors is also relatively very bullish on the stock, earmarking 1.6 percent of its 13F equity portfolio to VC.
As one would reasonably expect, specific money managers were leading the bulls’ herd. Columbus Circle Investors, managed by Principal Global Investors, initiated the biggest position in Visteon Corp (NASDAQ:VC). Columbus Circle Investors had $39.7 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $8.7 million investment in the stock during the quarter. The following funds were also among the new VC investors: Michael Gelband’s ExodusPoint Capital, Greg Eisner’s Engineers Gate Manager, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s also examine hedge fund activity in other stocks similar to Visteon Corp (NASDAQ:VC). These stocks are Ryman Hospitality Properties, Inc. (NYSE:RHP), Masonite International Corp (NYSE:DOOR), Innospec Inc. (NASDAQ:IOSP), Albany International Corp. (NYSE:AIN), Tenet Healthcare Corp (NYSE:THC), Prospect Capital Corporation (NASDAQ:PSEC), and Cardlytics, Inc. (NASDAQ:CDLX). This group of stocks’ market valuations are closest to VC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RHP | 25 | 311365 | -1 |
| DOOR | 27 | 425530 | 1 |
| IOSP | 18 | 89989 | 4 |
| AIN | 19 | 46345 | 1 |
| THC | 28 | 582586 | -7 |
| PSEC | 7 | 22588 | -1 |
| CDLX | 27 | 588778 | 1 |
| Average | 21.6 | 295312 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.6 hedge funds with bullish positions and the average amount invested in these stocks was $295 million. That figure was $236 million in VC’s case. Tenet Healthcare Corp (NYSE:THC) is the most popular stock in this table. On the other hand Prospect Capital Corporation (NASDAQ:PSEC) is the least popular one with only 7 bullish hedge fund positions. Visteon Corp (NASDAQ:VC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VC is 59.4. 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 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 24.8% in 2020 through the end of September and beat the market by 19.3 percentage points. Unfortunately VC wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on VC were disappointed as the stock returned 1.1% in Q3 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.
