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 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. Stocks kept going up since then. In this article we look at how hedge funds traded F.N.B. Corp (NYSE:FNB) and determine whether the smart money was really smart about this stock.
F.N.B. Corp (NYSE:FNB) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 24 hedge funds’ portfolios at the end of June. Our calculations also showed that FNB 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). 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 Baozun Inc (NASDAQ:BZUN), ABM Industries, Inc. (NYSE:ABM), and Applied Industrial Technologies Inc (NYSE:AIT) to gather more data points. Our calculations also showed that FNB 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.
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 56 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 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. 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. Keeping this in mind let’s view the key hedge fund action encompassing F.N.B. Corp (NYSE:FNB).
Hedge fund activity in F.N.B. Corp (NYSE:FNB)
At the end of the second quarter, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 19 hedge funds with a bullish position in FNB a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of F.N.B. Corp (NYSE:FNB), with a stake worth $19 million reported as of the end of September. Trailing Renaissance Technologies was Arrowstreet Capital, which amassed a stake valued at $8.8 million. EJF Capital, D E Shaw, and AQR Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position EJF Capital allocated the biggest weight to F.N.B. Corp (NYSE:FNB), around 1.24% of its 13F portfolio. Minerva Advisors is also relatively very bullish on the stock, earmarking 0.47 percent of its 13F equity portfolio to FNB.
Since F.N.B. Corp (NYSE:FNB) has faced falling interest from the aggregate hedge fund industry, it’s easy to see that there were a few funds that elected to cut their positions entirely last quarter. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the biggest investment of the 750 funds monitored by Insider Monkey, comprising an estimated $1.1 million in stock, and Greg Eisner’s Engineers Gate Manager was right behind this move, as the fund dropped about $0.3 million worth. These moves are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to F.N.B. Corp (NYSE:FNB). We will take a look at Baozun Inc (NASDAQ:BZUN), ABM Industries, Inc. (NYSE:ABM), Applied Industrial Technologies Inc (NYSE:AIT), Builders FirstSource, Inc. (NASDAQ:BLDR), Kodiak Sciences Inc (NASDAQ:KOD), J&J Snack Foods Corp. (NASDAQ:JJSF), and Integer Holdings Corporation (NYSE:ITGR). This group of stocks’ market caps are closest to FNB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BZUN | 15 | 70738 | 3 |
| ABM | 21 | 49636 | 3 |
| AIT | 15 | 29147 | 1 |
| BLDR | 32 | 456822 | 3 |
| KOD | 20 | 861824 | 8 |
| JJSF | 17 | 70981 | 0 |
| ITGR | 17 | 87073 | -3 |
| Average | 19.6 | 232317 | 2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.6 hedge funds with bullish positions and the average amount invested in these stocks was $232 million. That figure was $69 million in FNB’s case. Builders FirstSource, Inc. (NASDAQ:BLDR) is the most popular stock in this table. On the other hand Baozun Inc (NASDAQ:BZUN) is the least popular one with only 15 bullish hedge fund positions. F.N.B. Corp (NYSE:FNB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FNB is 61.5. 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 21.3% in 2020 through September 25th and beat the market by 17.7 percentage points. Unfortunately FNB wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on FNB were disappointed as the stock returned -11.9% during the same time period 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.
