Amid an overall market correction, many stocks that smart money investors were collectively bullish on tanked during the fourth quarter. Among them, Amazon and Netflix ranked among the top 30 picks and both lost more than 25%. Facebook, which was the second most popular stock, lost 20% amid uncertainty regarding the interest rates and tech valuations. Nevertheless, our research shows that most of the stocks that smart money likes historically generate strong risk-adjusted returns. That’s why we weren’t surprised when hedge funds’ top 15 large-cap stock picks generated a return of 19.7% during the first 2.5 months of 2019 and outperformed the broader market benchmark by 6.6 percentage points.This is why following the smart money sentiment is a useful tool at identifying the next stock to invest in.
Is FBL Financial Group, Inc. (NYSE:FFG) a bargain? Prominent investors are buying. The number of bullish hedge fund bets improved by 2 lately. Our calculations also showed that ffg isn’t among the 30 most popular stocks among hedge funds. FFG was in 6 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 4 hedge funds in our database with FFG positions at the end of the previous quarter.
At the moment there are tons of methods investors employ to size up their holdings. A couple of the most under-the-radar methods are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the top money managers can outpace the market by a very impressive amount (see the details here).
We’re going to review the new hedge fund action regarding FBL Financial Group, Inc. (NYSE:FFG).
What have hedge funds been doing with FBL Financial Group, Inc. (NYSE:FFG)?
At Q4’s end, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from one quarter earlier. On the other hand, there were a total of 5 hedge funds with a bullish position in FFG a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in FBL Financial Group, Inc. (NYSE:FFG) was held by Millennium Management, which reported holding $1 million worth of stock at the end of December. It was followed by AQR Capital Management with a $1 million position. Other investors bullish on the company included Renaissance Technologies, Laurion Capital Management, and Citadel Investment Group.
Now, some big names have jumped into FBL Financial Group, Inc. (NYSE:FFG) headfirst. Renaissance Technologies, managed by Jim Simons, created the biggest position in FBL Financial Group, Inc. (NYSE:FFG). Renaissance Technologies had $1 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.7 million investment in the stock during the quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as FBL Financial Group, Inc. (NYSE:FFG) but similarly valued. We will take a look at BP Midstream Partners LP (NYSE:BPMP), AeroVironment, Inc. (NASDAQ:AVAV), Comfort Systems USA, Inc. (NYSE:FIX), and Altra Industrial Motion Corp. (NASDAQ:AIMC). This group of stocks’ market caps resemble FFG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BPMP | 3 | 42610 | -1 |
| AVAV | 9 | 33016 | -4 |
| FIX | 24 | 176595 | 2 |
| AIMC | 21 | 243891 | -14 |
| Average | 14.25 | 124028 | -4.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $124 million. That figure was $4 million in FFG’s case. Comfort Systems USA, Inc. (NYSE:FIX) is the most popular stock in this table. On the other hand BP Midstream Partners LP (NYSE:BPMP) is the least popular one with only 3 bullish hedge fund positions. FBL Financial Group, Inc. (NYSE:FFG) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately FFG wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); FFG investors were disappointed as the stock returned -1.5% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
