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 Cullen/Frost Bankers, Inc. (NYSE:CFR) based on that data.
Is Cullen/Frost Bankers, Inc. (NYSE:CFR) the right pick for your portfolio? Prominent investors are really in a pessimistic mood. The number of bullish hedge fund positions experienced a decline of 1 recently. There were 13 hedge funds in our database with CFR positions at the end of September. At the end of this article we will also compare CFR to other stocks including Orbital ATK Inc (NYSE:OA), Graphic Packaging Holding Company (NYSE:GPK), and Cinemark Holdings, Inc. (NYSE:CNK) to get a better sense of its popularity.
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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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Now, we’re going to analyze the recent action surrounding Cullen/Frost Bankers, Inc. (NYSE:CFR).
How are hedge funds trading Cullen/Frost Bankers, Inc. (NYSE:CFR)?
Heading into the fourth quarter of 2016, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in CFR over the last 5 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.
Of the funds tracked by Insider Monkey, Fisher Asset Management, led by Ken Fisher, holds the largest position in Cullen/Frost Bankers, Inc. (NYSE:CFR). Fisher Asset Management has a $17.8 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Fisher Asset Management’s heels is Dmitry Balyasny of Balyasny Asset Management, with a $16.7 million position. Some other professional money managers that are bullish comprise Carson Yost’s Yost Capital Management, Martin Whitman’s Third Avenue Management and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that Yost Capital Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Due to the fact that Cullen/Frost Bankers, Inc. (NYSE:CFR) has faced falling interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few hedge funds that decided to sell off their positions entirely last quarter. Intriguingly, Solomon Kumin’s Folger Hill Asset Management said goodbye to the largest investment of all the hedgies watched by Insider Monkey, valued at close to $3 million in stock. John W. Rogers’s fund, Ariel Investments, also sold off its stock, about $2 million worth.
Let’s check out hedge fund activity in other stocks similar to Cullen/Frost Bankers, Inc. (NYSE:CFR). We will take a look at Orbital ATK Inc (NYSE:OA), Graphic Packaging Holding Company (NYSE:GPK), Cinemark Holdings, Inc. (NYSE:CNK), and Thor Industries, Inc. (NYSE:THO). This group of stocks’ market values are closest to CFR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OA | 33 | 507862 | 1 |
| GPK | 32 | 936168 | -4 |
| CNK | 17 | 281357 | -1 |
| THO | 25 | 317743 | 2 |
As you can see these stocks had an average of 26.75 hedge funds with bullish positions and the average amount invested in these stocks was $511 million. That figure was $66 million in CFR’s case. Orbital ATK Inc (NYSE:OA) is the most popular stock in this table. On the other hand Cinemark Holdings, Inc. (NYSE:CNK) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Cullen/Frost Bankers, Inc. (NYSE:CFR) is even less popular than CNK. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Disclosure: none
