Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA).
Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 8 hedge funds’ portfolios at the end of March. At the end of this article we will also compare BBVA to other stocks including Cummins Inc. (NYSE:CMI), Liberty Broadband Corp (NASDAQ:LBRDK), and ING Groep N.V. (NYSE:ING) to get a better sense of its popularity.
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 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.
Ken Fisher of Fisher Asset Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a look at the new hedge fund action encompassing Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA).
What have hedge funds been doing with Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA)?
At Q1’s end, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BBVA over the last 18 quarters. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Fisher’s Fisher Asset Management has the number one position in Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA), worth close to $117.6 million, comprising 0.1% of its total 13F portfolio. Coming in second is Robert Richards of Heathbridge Capital Management, with a $20 million position; the fund has 5.4% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions consist of John Overdeck and David Siegel’s Two Sigma Advisors, Dmitry Balyasny’s Balyasny Asset Management and Claes Fornell’s CSat Investment Advisory. In terms of the portfolio weights assigned to each position Heathbridge Capital Management allocated the biggest weight to Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA), around 5.36% of its 13F portfolio. Fisher Asset Management is also relatively very bullish on the stock, setting aside 0.15 percent of its 13F equity portfolio to BBVA.
Judging by the fact that Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA) has faced falling interest from hedge fund managers, logic holds that there lies a certain “tier” of funds that slashed their positions entirely last quarter. Intriguingly, Ken Griffin’s Citadel Investment Group cut the largest position of the 750 funds followed by Insider Monkey, comprising close to $3.2 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund sold off about $0.4 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA) but similarly valued. These stocks are Cummins Inc. (NYSE:CMI), Liberty Broadband Corp (NASDAQ:LBRDK), ING Groep N.V. (NYSE:ING), and Splunk Inc (NASDAQ:SPLK). This group of stocks’ market caps resemble BBVA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CMI | 34 | 326816 | -5 |
| LBRDK | 45 | 3334060 | -1 |
| ING | 13 | 298860 | -1 |
| SPLK | 37 | 340300 | -1 |
| Average | 32.25 | 1075009 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.25 hedge funds with bullish positions and the average amount invested in these stocks was $1075 million. That figure was $142 million in BBVA’s case. Liberty Broadband Corp (NASDAQ:LBRDK) is the most popular stock in this table. On the other hand ING Groep N.V. (NYSE:ING) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA) is even less popular than ING. Hedge funds dodged a bullet by taking a bearish stance towards BBVA. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th but managed to beat the market by 14.8 percentage points. Unfortunately BBVA wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); BBVA investors were disappointed as the stock returned 20.1% during the second quarter (through June 17th) 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 so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
