A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended December 31, so let’s proceed with the discussion of the hedge fund sentiment on Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG).
Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG) was in 11 hedge funds’ portfolios at the end of December. SMFG has seen an increase in hedge fund sentiment lately. There were 10 hedge funds in our database with SMFG holdings at the end of the previous quarter. Our calculations also showed that SMFG isn’t among the 30 most popular stocks among hedge funds.
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 has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
We’re going to analyze the key hedge fund action encompassing Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG).
Hedge fund activity in Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG)
At Q4’s end, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SMFG over the last 14 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Fisher Asset Management was the largest shareholder of Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG), with a stake worth $389.9 million reported as of the end of September. Trailing Fisher Asset Management was LMR Partners, which amassed a stake valued at $23.9 million. Marshall Wace LLP, D E Shaw, and Renaissance Technologies were also very fond of the stock, giving the stock large weights in their portfolios.
As one would reasonably expect, specific money managers have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most valuable position in Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG). Marshall Wace LLP had $7.7 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.5 million investment in the stock during the quarter. The only other fund with a brand new SMFG position is Matthew Tewksbury’s Stevens Capital Management.
Let’s also examine hedge fund activity in other stocks similar to Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG). We will take a look at Lloyds Banking Group PLC (NYSE:LYG), The Southern Company (NYSE:SO), Allergan plc (NYSE:AGN), and Crown Castle International Corp. (REIT) (NYSE:CCI). All of these stocks’ market caps resemble SMFG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LYG | 10 | 30461 | 5 |
| SO | 20 | 708177 | -4 |
| AGN | 61 | 3404314 | -1 |
| CCI | 34 | 2074129 | 2 |
| Average | 31.25 | 1554270 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.25 hedge funds with bullish positions and the average amount invested in these stocks was $1554 million. That figure was $436 million in SMFG’s case. Allergan plc (NYSE:AGN) is the most popular stock in this table. On the other hand Lloyds Banking Group PLC (NYSE:LYG) is the least popular one with only 10 bullish hedge fund positions. Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG) 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 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Unfortunately SMFG wasn’t in this group. Hedge funds that bet on SMFG were disappointed as the stock returned 9.7% and underperformed the market. If you are interested in investing in large cap stocks, you should check out the top 15 hedge fund stocks as 13 of these outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.
