Is Fiserv, Inc. (FISV) Going to Burn These Hedge Funds?

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 fourth 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 Fiserv, Inc. (NASDAQ:FISV) based on that data.

Is Fiserv, Inc. (NASDAQ:FISV) undervalued? Investors who are in the know were cutting their exposure. The number of bullish hedge fund bets decreased by 19 lately. Fiserv, Inc. (NASDAQ:FISV) was in 75 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 94. Our calculations also showed that FISV isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 94 hedge funds in our database with FISV holdings at the end of December.

At the moment there are plenty of signals market participants use to analyze stocks. A duo of the best signals are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the elite fund managers can beat the S&P 500 by a superb margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Michael Lowenstein of Kensico Capital

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Do Hedge Funds Think FISV Is A Good Stock To Buy Now?

At the end of the first quarter, a total of 75 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -20% from the fourth quarter of 2020. On the other hand, there were a total of 67 hedge funds with a bullish position in FISV a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Fiserv, Inc. (NASDAQ:FISV) was held by BlueSpruce Investments, which reported holding $599 million worth of stock at the end of December. It was followed by Kensico Capital with a $203.3 million position. Other investors bullish on the company included Steadfast Capital Management, Omega Advisors, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Columbus Point allocated the biggest weight to Fiserv, Inc. (NASDAQ:FISV), around 14.02% of its 13F portfolio. BlueSpruce Investments is also relatively very bullish on the stock, dishing out 11.89 percent of its 13F equity portfolio to FISV.

Seeing as Fiserv, Inc. (NASDAQ:FISV) has witnessed a decline in interest from the aggregate hedge fund industry, we can see that there lies a certain “tier” of fund managers who were dropping their positions entirely in the first quarter. At the top of the heap, Gabriel Plotkin’s Melvin Capital Management said goodbye to the biggest stake of the 750 funds tracked by Insider Monkey, valued at close to $990.4 million in stock, and Leon Shaulov’s Maplelane Capital was right behind this move, as the fund dumped about $261.3 million worth. These transactions are important to note, as aggregate hedge fund interest fell by 19 funds in the first quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Fiserv, Inc. (NASDAQ:FISV) but similarly valued. These stocks are Infosys Limited (NYSE:INFY), The TJX Companies, Inc. (NYSE:TJX), Snap Inc. (NYSE:SNAP), Prologis Inc (NYSE:PLD), Truist Financial Corporation (NYSE:TFC), The Bank of Nova Scotia (NYSE:BNS), and China Petroleum & Chemical Corp (NYSE:SNP). This group of stocks’ market valuations are closest to FISV’s market valuation.

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As you can see these stocks had an average of 38.1 hedge funds with bullish positions and the average amount invested in these stocks was $1536 million. That figure was $2748 million in FISV’s case. Snap Inc. (NYSE:SNAP) is the most popular stock in this table. On the other hand China Petroleum & Chemical Corp (NYSE:SNP) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Fiserv, Inc. (NASDAQ:FISV) is more popular among hedge funds. Our overall hedge fund sentiment score for FISV is 59.9. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Unfortunately FISV wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FISV were disappointed as the stock returned -7.4% since the end of the first quarter (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

Disclosure: None. This article was originally published at Insider Monkey.

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