Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 750 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Fidelity National Information Services Inc. (NYSE:FIS).
Fidelity National Information Services Inc. (NYSE:FIS) was in 59 hedge funds’ portfolios at the end of June. FIS shareholders have witnessed an increase in support from the world’s most elite money managers of late. There were 55 hedge funds in our database with FIS holdings at the end of the previous quarter. Our calculations also showed that FIS isn’t among the 30 most popular stocks among hedge funds (watch the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
At the moment there are tons of gauges shareholders can use to assess stocks. Two of the most innovative gauges are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the elite money managers can outperform the broader indices by a very impressive amount (see the details here).
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a glance at the latest hedge fund action surrounding Fidelity National Information Services Inc. (NYSE:FIS).
How are hedge funds trading Fidelity National Information Services Inc. (NYSE:FIS)?
Heading into the third quarter of 2019, a total of 59 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in FIS over the last 16 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Cantillon Capital Management was the largest shareholder of Fidelity National Information Services Inc. (NYSE:FIS), with a stake worth $512.7 million reported as of the end of March. Trailing Cantillon Capital Management was D E Shaw, which amassed a stake valued at $512.4 million. Citadel Investment Group, Two Sigma Advisors, and Farallon Capital were also very fond of the stock, giving the stock large weights in their portfolios.
With a general bullishness amongst the heavyweights, specific money managers have jumped into Fidelity National Information Services Inc. (NYSE:FIS) headfirst. D1 Capital Partners, managed by Daniel Sundheim, initiated the largest position in Fidelity National Information Services Inc. (NYSE:FIS). D1 Capital Partners had $200.7 million invested in the company at the end of the quarter. Doug Silverman and Alexander Klabin’s Senator Investment Group also initiated a $153.4 million position during the quarter. The following funds were also among the new FIS investors: Robert Pitts’s Steadfast Capital Management, Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management, and Gabriel Plotkin’s Melvin Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Fidelity National Information Services Inc. (NYSE:FIS) but similarly valued. These stocks are Ford Motor Company (NYSE:F), Ferrari N.V. (NYSE:RACE), Koninklijke Philips NV (NYSE:PHG), and Tesla Inc. (NASDAQ:TSLA). This group of stocks’ market caps are similar to FIS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| F | 39 | 1594561 | 6 |
| RACE | 30 | 1266186 | 2 |
| PHG | 8 | 200510 | -3 |
| TSLA | 37 | 711450 | 5 |
| Average | 28.5 | 943177 | 2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.5 hedge funds with bullish positions and the average amount invested in these stocks was $943 million. That figure was $4783 million in FIS’s case. Ford Motor Company (NYSE:F) is the most popular stock in this table. On the other hand Koninklijke Philips NV (NYSE:PHG) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Fidelity National Information Services Inc. (NYSE:FIS) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on FIS as the stock returned 8.5% during Q3 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.
