Here is What Hedge Funds Think About Raymond James Financial, Inc. (RJF)

In this article we are going to use hedge fund sentiment as a tool and determine whether Raymond James Financial, Inc. (NYSE:RJF) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Raymond James Financial, Inc. (NYSE:RJF) has seen a decrease in enthusiasm from smart money in recent months. Raymond James Financial, Inc. (NYSE:RJF) was in 29 hedge funds’ portfolios at the end of June. The all time high for this statistic is 35. There were 33 hedge funds in our database with RJF positions at the end of the first quarter. Our calculations also showed that RJF isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

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 monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Glenn Greenberg of Brave Warrior Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now we’re going to take a gander at the fresh hedge fund action encompassing Raymond James Financial, Inc. (NYSE:RJF).

Do Hedge Funds Think RJF Is A Good Stock To Buy Now?

At second quarter’s end, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in RJF over the last 24 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

Among these funds, Brave Warrior Capital held the most valuable stake in Raymond James Financial, Inc. (NYSE:RJF), which was worth $211.3 million at the end of the second quarter. On the second spot was Fisher Asset Management which amassed $102.5 million worth of shares. Citadel Investment Group, Southpoint Capital Advisors, and Schonfeld Strategic Advisors 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 Brave Warrior Capital allocated the biggest weight to Raymond James Financial, Inc. (NYSE:RJF), around 7.25% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, earmarking 3.35 percent of its 13F equity portfolio to RJF.

Judging by the fact that Raymond James Financial, Inc. (NYSE:RJF) has witnessed bearish sentiment from hedge fund managers, it’s safe to say that there lies a certain “tier” of fund managers who were dropping their positions entirely in the second quarter. At the top of the heap, Brandon Haley’s Holocene Advisors said goodbye to the biggest stake of all the hedgies followed by Insider Monkey, totaling about $56.7 million in stock, and Gregg Moskowitz’s Interval Partners was right behind this move, as the fund dumped about $6.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 4 funds in the second quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Raymond James Financial, Inc. (NYSE:RJF). These stocks are Duke Realty Corporation (NYSE:DRE), Brookfield Property Partners LP (NASDAQ:BPY), Amcor plc (NYSE:AMCR), Clarivate Plc (NYSE:CLVT), MarketAxess Holdings Inc. (NASDAQ:MKTX), Bio-Techne Corporation (NASDAQ:TECH), and Pembina Pipeline Corp (NYSE:PBA). This group of stocks’ market values resemble RJF’s market value.

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As you can see these stocks had an average of 22.9 hedge funds with bullish positions and the average amount invested in these stocks was $1022 million. That figure was $662 million in RJF’s case. Clarivate Plc (NYSE:CLVT) is the most popular stock in this table. On the other hand Duke Realty Corporation (NYSE:DRE) is the least popular one with only 15 bullish hedge fund positions. Raymond James Financial, Inc. (NYSE:RJF) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RJF is 52.8. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on RJF as the stock returned 16% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.