We at Insider Monkey have gone over 742 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article, we look at what those funds think of Capital One Financial Corp. (NYSE:COF) based on that data.
So, is Capital One Financial Corp. (NYSE:COF) a buy here? Investors who are in the know seem to be becoming less confident, since the number of long hedge fund bets declined by six during the third quarter. In this way, a total of 40 funds from our database held shares of Capital One Financial Corp at the end of September. At the end of this article we will also compare COF to other stocks including Nokia Corporation (ADR) (NYSE:NOK), Exelon Corporation (NYSE:EXC), and Praxair, Inc. (NYSE:PX) to get a better sense of its popularity.
Follow Capital One Financial Corp (NYSE:COF)
Follow Capital One Financial Corp (NYSE:COF)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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With all of this in mind, we’re going to go over the latest action surrounding Capital One Financial Corp. (NYSE:COF).
Hedge fund activity in Capital One Financial Corp. (NYSE:COF)
A total of 40 funds tracked by Insider Monkey held long positions in Capital One Financial Corp. at the end of September, down by 13% over the quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Ric Dillon’s Diamond Hill Capital has the largest position in Capital One Financial Corp. (NYSE:COF), worth close to $358.8 million, comprising 2.2% of its total 13F portfolio. Coming in second is Pzena Investment Management, led by Richard S. Pzena, holding a $229.2 million position; 1.4% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors with similar optimism comprise Thomas E. Claugus’ GMT Capital, Cliff Asness’ AQR Capital Management, the biggest hedge fund in the world, and Ken Fisher’s Fisher Asset Management.
Judging by the fact that Capital One Financial Corp. (NYSE:COF) has experienced declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there exists a select few money managers who sold off their full holdings last quarter. Intriguingly, Principal Global Investors’ Columbus Circle Investors said goodbye to the biggest stake of all the hedgies watched by Insider Monkey, valued at an estimated $86.5 million in stock, and Clint Carlson’s Carlson Capital was right behind this move, as the fund cut about $50.8 million worth of shares.
Let’s also examine hedge fund activity in other stocks similar to Capital One Financial Corp. (NYSE:COF). These stocks are Nokia Corporation (ADR) (NYSE:NOK), Exelon Corporation (NYSE:EXC), Praxair, Inc. (NYSE:PX), and Barclays PLC (ADR) (NYSE:BCS). This group of stocks’ market values are closest to COF’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NOK | 16 | 555348 | 1 |
| EXC | 25 | 781952 | -2 |
| PX | 34 | 536035 | -1 |
| BCS | 14 | 235346 | -1 |
As you can see these stocks had an average of 22 investors holding long positions and the average amount invested in these stocks was $527 million. That figure was $1441 million in COF’s case. Praxair, Inc. (NYSE:PX) is the most popular stock in this table. On the other hand Barclays PLC (ADR) (NYSE:BCS) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Capital One Financial Corp. (NYSE:COF) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
