Insider Monkey has processed numerous 13F filings of hedge funds and successful investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of First Data Corporation (NYSE:FDC) based on that data.
Is First Data Corporation (NYSE:FDC) going to take off soon? Investors who are in the know are betting on the stock. The number of long hedge fund positions went up by 5 recently. Our calculations also showed that FDC isn’t among the 30 most popular stocks among hedge funds. FDC was in 57 hedge funds’ portfolios at the end of March. There were 52 hedge funds in our database with FDC holdings at the end of the previous quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to take a look at the key hedge fund action surrounding First Data Corporation (NYSE:FDC).
How are hedge funds trading First Data Corporation (NYSE:FDC)?
At Q1’s end, a total of 57 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the previous quarter. By comparison, 36 hedge funds held shares or bullish call options in FDC a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in First Data Corporation (NYSE:FDC) was held by Steadfast Capital Management, which reported holding $387.6 million worth of stock at the end of March. It was followed by Glenview Capital with a $382.3 million position. Other investors bullish on the company included Melvin Capital Management, Carlson Capital, and Magnetar Capital.
As industrywide interest jumped, key money managers were breaking ground themselves. Carlson Capital, managed by Clint Carlson, initiated the biggest position in First Data Corporation (NYSE:FDC). Carlson Capital had $305.6 million invested in the company at the end of the quarter. Robert Emil Zoellner’s Alpine Associates also made a $194.1 million investment in the stock during the quarter. The other funds with brand new FDC positions are Jose Fernandez’s Stepstone Group, Boykin Curry’s Eagle Capital Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as First Data Corporation (NYSE:FDC) but similarly valued. These stocks are Coca-Cola European Partners plc (NYSE:CCEP), Hilton Worldwide Holdings Inc (NYSE:HLT), Ctrip.com International, Ltd. (NASDAQ:CTRP), and Archer Daniels Midland Company (NYSE:ADM). This group of stocks’ market valuations are similar to FDC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CCEP | 13 | 289525 | -4 |
| HLT | 51 | 3976926 | 4 |
| CTRP | 29 | 1288524 | 8 |
| ADM | 25 | 625238 | -4 |
| Average | 29.5 | 1545053 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.5 hedge funds with bullish positions and the average amount invested in these stocks was $1545 million. That figure was $3760 million in FDC’s case. Hilton Worldwide Holdings Inc (NYSE:HLT) is the most popular stock in this table. On the other hand Coca-Cola European Partners plc (NYSE:CCEP) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks First Data Corporation (NYSE:FDC) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately FDC wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on FDC were disappointed as the stock returned -1.6% during the same 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 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
