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 September 30, so let’s proceed with the discussion of the hedge fund sentiment on First Horizon National Corporation (NYSE:FHN).
Is FHN a good stock to buy? Hedge funds were turning less bullish. The number of bullish hedge fund positions dropped by 5 in recent months. First Horizon National Corporation (NYSE:FHN) was in 30 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 35. Our calculations also showed that FHN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 35 hedge funds in our database with FHN holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most shareholders, hedge funds are seen as unimportant, outdated investment vehicles of yesteryear. While there are over 8000 funds trading at the moment, We choose to focus on the upper echelon of this group, approximately 850 funds. These investment experts command bulk of the smart money’s total asset base, and by observing their best stock picks, Insider Monkey has uncovered various investment strategies that have historically outrun the broader indices. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Peter Rathjens of Arrowstreet Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 website. Keeping this in mind let’s take a peek at the new hedge fund action regarding First Horizon National Corporation (NYSE:FHN).
Do Hedge Funds Think FHN Is A Good Stock To Buy Now?
At third quarter’s end, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FHN over the last 21 quarters. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
More specifically, Citadel Investment Group was the largest shareholder of First Horizon National Corporation (NYSE:FHN), with a stake worth $188.8 million reported as of the end of September. Trailing Citadel Investment Group was Carlson Capital, which amassed a stake valued at $44.2 million. Arrowstreet Capital, Adage Capital Management, and Gillson Capital 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 Mendon Capital Advisors allocated the biggest weight to First Horizon National Corporation (NYSE:FHN), around 4.38% of its 13F portfolio. Huber Capital Management is also relatively very bullish on the stock, earmarking 3.29 percent of its 13F equity portfolio to FHN.
Because First Horizon National Corporation (NYSE:FHN) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few hedgies that elected to cut their positions entirely last quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the biggest investment of the “upper crust” of funds monitored by Insider Monkey, totaling close to $14.4 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund dropped about $8.4 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 5 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to First Horizon National Corporation (NYSE:FHN). We will take a look at Axalta Coating Systems Ltd (NYSE:AXTA), MSA Safety Incorporated (NYSE:MSA), Lithia Motors Inc (NYSE:LAD), Jabil Inc. (NYSE:JBL), Dicks Sporting Goods Inc (NYSE:DKS), Flowers Foods, Inc. (NYSE:FLO), and Tetra Tech, Inc. (NASDAQ:TTEK). This group of stocks’ market values are similar to FHN’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AXTA | 45 | 1220833 | -2 |
| MSA | 14 | 18753 | -12 |
| LAD | 49 | 1149267 | 18 |
| JBL | 31 | 399819 | 0 |
| DKS | 41 | 626418 | 1 |
| FLO | 30 | 298843 | 6 |
| TTEK | 22 | 88894 | 3 |
| Average | 33.1 | 543261 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.1 hedge funds with bullish positions and the average amount invested in these stocks was $543 million. That figure was $379 million in FHN’s case. Lithia Motors Inc (NYSE:LAD) is the most popular stock in this table. On the other hand MSA Safety Incorporated (NYSE:MSA) is the least popular one with only 14 bullish hedge fund positions. First Horizon National Corporation (NYSE:FHN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FHN is 48.6. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. A small number of hedge funds were also right about betting on FHN as the stock returned 32.4% since the end of the third quarter (through 12/18) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
