Insider Monkey has processed numerous 13F filings of hedge funds and successful value 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 third quarter. You can find articles 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 over the last 6 years and analyze what the smart money thinks of State Street Corporation (NYSE:STT) based on that data and determine whether they were really smart about the stock.
State Street Corporation (NYSE:STT) was in 42 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 45. STT investors should pay attention to an increase in hedge fund sentiment in recent months. There were 37 hedge funds in our database with STT positions at the end of the second quarter. Our calculations also showed that STT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Now let’s review the latest hedge fund action surrounding State Street Corporation (NYSE:STT).
Donald Yacktman of Yacktman Asset Management
Do Hedge Funds Think STT Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 42 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 14% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in STT over the last 25 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Yacktman Asset Management was the largest shareholder of State Street Corporation (NYSE:STT), with a stake worth $297.3 million reported as of the end of September. Trailing Yacktman Asset Management was Citadel Investment Group, which amassed a stake valued at $169.7 million. Millennium Management, Balyasny Asset Management, 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 Prana Capital Management allocated the biggest weight to State Street Corporation (NYSE:STT), around 7% of its 13F portfolio. Yacktman Asset Management is also relatively very bullish on the stock, earmarking 2.86 percent of its 13F equity portfolio to STT.
Now, key money managers were leading the bulls’ herd. Balyasny Asset Management, managed by Dmitry Balyasny, established the biggest position in State Street Corporation (NYSE:STT). Balyasny Asset Management had $90.1 million invested in the company at the end of the quarter. Joseph Samuels’s Islet Management also made a $55.6 million investment in the stock during the quarter. The other funds with brand new STT positions are Frank Fu’s CaaS Capital, Dmitry Balyasny’s Balyasny Asset Management, and Stuart J. Zimmer’s Zimmer Partners.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as State Street Corporation (NYSE:STT) but similarly valued. These stocks are AvalonBay Communities Inc (NYSE:AVB), Corteva, Inc. (NYSE:CTVA), Seagen Inc. (NASDAQ:SGEN), Equifax Inc. (NYSE:EFX), McKesson Corporation (NYSE:MCK), Public Service Enterprise Group Incorporated (NYSE:PEG), and Suncor Energy Inc. (NYSE:SU). This group of stocks’ market valuations are similar to STT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AVB | 28 | 376882 | 2 |
| CTVA | 41 | 1161923 | 7 |
| SGEN | 40 | 9471190 | 3 |
| EFX | 43 | 3360148 | 6 |
| MCK | 51 | 2277126 | 0 |
| PEG | 26 | 518847 | 0 |
| SU | 32 | 1084858 | 0 |
| Average | 37.3 | 2607282 | 2.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 37.3 hedge funds with bullish positions and the average amount invested in these stocks was $2607 million. That figure was $1480 million in STT’s case. McKesson Corporation (NYSE:MCK) is the most popular stock in this table. On the other hand Public Service Enterprise Group Incorporated (NYSE:PEG) is the least popular one with only 26 bullish hedge fund positions. State Street Corporation (NYSE:STT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for STT is 70. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on STT as the stock returned 12.2% since the end of Q3 (through 1/31) 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.
