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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Fidelity National Information Services Inc. (NYSE:FIS)?
Hedge fund interest in Fidelity National Information Services Inc. (NYSE:FIS) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Diageo plc (NYSE:DEO), Sony Corporation (NYSE:SNE), and T-Mobile US, Inc. (NASDAQ:TMUS) to gather more data points. Our calculations also showed that FIS is 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 44 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.
William Von Mueffling of Cantillon Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we asked astrophysicist Neil deGrasse Tyson about Tesla, Elon Musk, and his top stock picks. 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 S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a peek at the recent hedge fund action regarding Fidelity National Information Services Inc. (NYSE:FIS).
How are hedge funds trading Fidelity National Information Services Inc. (NYSE:FIS)?
At the end of the first quarter, a total of 105 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in FIS over the last 18 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Citadel Investment Group, managed by Ken Griffin, holds the number one position in Fidelity National Information Services Inc. (NYSE:FIS). Citadel Investment Group has a $627.4 million position in the stock, comprising 0.3% of its 13F portfolio. The second most bullish fund manager is Melvin Capital Management, led by Gabriel Plotkin, holding a $584.3 million position; 4.7% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism encompass Farallon Capital, William von Mueffling’s Cantillon Capital Management and Andreas Halvorsen’s Viking Global. In terms of the portfolio weights assigned to each position Caldera Capital allocated the biggest weight to Fidelity National Information Services Inc. (NYSE:FIS), around 19.8% of its 13F portfolio. Clearfield Capital is also relatively very bullish on the stock, designating 14.95 percent of its 13F equity portfolio to FIS.
Due to the fact that Fidelity National Information Services Inc. (NYSE:FIS) has faced a decline in interest from the aggregate hedge fund industry, logic holds that there is a sect of funds who were dropping their positions entirely last quarter. At the top of the heap, Larry Robbins’s Glenview Capital dumped the biggest investment of the “upper crust” of funds watched by Insider Monkey, totaling close to $55.3 million in stock. Doug Gordon, Jon Hilsabeck and Don Jabro’s fund, Shellback Capital, also dumped its stock, about $54.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
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. We will take a look at Diageo plc (NYSE:DEO), Sony Corporation (NYSE:SNE), T-Mobile US, Inc. (NASDAQ:TMUS), and Altria Group Inc (NYSE:MO). This group of stocks’ market valuations are similar to FIS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DEO | 17 | 621500 | 0 |
| SNE | 28 | 461322 | 2 |
| TMUS | 65 | 1645711 | 4 |
| MO | 46 | 1439983 | -8 |
| Average | 39 | 1042129 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 39 hedge funds with bullish positions and the average amount invested in these stocks was $1042 million. That figure was $8378 million in FIS’s case. T-Mobile US, Inc. (NASDAQ:TMUS) is the most popular stock in this table. On the other hand Diageo plc (NYSE:DEO) is the least popular one with only 17 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 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 7.9% in 2020 through May 22nd and still beat the market by 15.6 percentage points. Unfortunately FIS wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on FIS were disappointed as the stock returned 11.9% during the second quarter (through May 22nd) 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 most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.
