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 821 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 March 31st, a week after the market trough. In this article we look at what those investors think of Waddell & Reed Financial, Inc. (NYSE:WDR).
Waddell & Reed Financial, Inc. (NYSE:WDR) investors should be aware of an increase in hedge fund sentiment lately. WDR was in 22 hedge funds’ portfolios at the end of March. There were 21 hedge funds in our database with WDR holdings at the end of the previous quarter. Our calculations also showed that WDR isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to go over the key hedge fund action encompassing Waddell & Reed Financial, Inc. (NYSE:WDR).
How are hedge funds trading Waddell & Reed Financial, Inc. (NYSE:WDR)?
Heading into the second quarter of 2020, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 5% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards WDR over the last 18 quarters. 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 Waddell & Reed Financial, Inc. (NYSE:WDR) was held by GAMCO Investors, which reported holding $15.7 million worth of stock at the end of September. It was followed by Fisher Asset Management with a $13.9 million position. Other investors bullish on the company included Arrowstreet Capital, GMT Capital, and Yacktman Asset Management. In terms of the portfolio weights assigned to each position Factorial Partners allocated the biggest weight to Waddell & Reed Financial, Inc. (NYSE:WDR), around 1.16% of its 13F portfolio. Invenomic Capital Management is also relatively very bullish on the stock, designating 0.39 percent of its 13F equity portfolio to WDR.
As aggregate interest increased, key money managers have jumped into Waddell & Reed Financial, Inc. (NYSE:WDR) headfirst. GMT Capital, managed by Thomas E. Claugus, assembled the largest position in Waddell & Reed Financial, Inc. (NYSE:WDR). GMT Capital had $6.7 million invested in the company at the end of the quarter. Donald Yacktman’s Yacktman Asset Management also initiated a $5.1 million position during the quarter. The other funds with new positions in the stock are Gregg Moskowitz’s Interval Partners, Greg Eisner’s Engineers Gate Manager, and Ali Motamed’s Invenomic Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Waddell & Reed Financial, Inc. (NYSE:WDR) but similarly valued. We will take a look at Newmark Group, Inc. (NASDAQ:NMRK), Saul Centers Inc (NYSE:BFS), Raven Industries, Inc. (NASDAQ:RAVN), and Teekay LNG Partners L.P. (NYSE:TGP). This group of stocks’ market values are similar to WDR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NMRK | 24 | 66647 | 1 |
| BFS | 7 | 25019 | -1 |
| RAVN | 11 | 73375 | -2 |
| TGP | 10 | 38247 | -3 |
| Average | 13 | 50822 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $51 million. That figure was $74 million in WDR’s case. Newmark Group, Inc. (NASDAQ:NMRK) is the most popular stock in this table. On the other hand Saul Centers Inc (NYSE:BFS) is the least popular one with only 7 bullish hedge fund positions. Waddell & Reed Financial, Inc. (NYSE:WDR) is not the most popular stock in this group but hedge fund interest is still above average. 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 13.9% in 2020 through June 10th but still beat the market by 14.2 percentage points. Hedge funds were also right about betting on WDR as the stock returned 40% in Q2 (through June 10th) 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.
