Is Ford (F) Stock A Buy or Sell?

In this article you are going to find out whether hedge funds think Ford Motor Company (NYSE:F) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Is Ford (F) stock a buy or sell? Investors who are in the know were taking a bullish view. The number of long hedge fund positions increased by 3 lately. Ford Motor Company (NYSE:F) was in 41 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 42. Our calculations also showed that F isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 38 hedge funds in our database with F holdings at the end of September.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).

John Overdeck of Two Sigma Advisors

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 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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. With all of this in mind let’s take a gander at the key hedge fund action encompassing Ford Motor Company (NYSE:F).

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

Heading into the first quarter of 2021, a total of 41 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards F over the last 22 quarters. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

Among these funds, Arrowstreet Capital held the most valuable stake in Ford Motor Company (NYSE:F), which was worth $436.8 million at the end of the fourth quarter. On the second spot was Pzena Investment Management which amassed $391.5 million worth of shares. GLG Partners, Greenhaven Associates, and Two Sigma 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 Albar Capital allocated the biggest weight to Ford Motor Company (NYSE:F), around 3.84% of its 13F portfolio. Greenhaven Associates is also relatively very bullish on the stock, designating 3.22 percent of its 13F equity portfolio to F.

With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Candlestick Capital Management, managed by Jack Woodruff, assembled the largest position in Ford Motor Company (NYSE:F). Candlestick Capital Management had $11 million invested in the company at the end of the quarter. Javier Velazquez’s Albar Capital also made a $8.1 million investment in the stock during the quarter. The other funds with brand new F positions are Robert Bishop’s Impala Asset Management, Peter Muller’s PDT Partners, and Parvinder Thiara’s Athanor Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Ford Motor Company (NYSE:F) but similarly valued. These stocks are Trane Technologies plc (NYSE:TT), Centene Corporation (NYSE:CNC), Xilinx, Inc. (NASDAQ:XLNX), Lloyds Banking Group PLC (NYSE:LYG), Barclays PLC (NYSE:BCS), eBay Inc (NASDAQ:EBAY), and Lufax Holding Ltd (NYSE:LU). All of these stocks’ market caps match F’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 33.9 hedge funds with bullish positions and the average amount invested in these stocks was $1681 million. That figure was $1652 million in F’s case. Xilinx, Inc. (NASDAQ:XLNX) is the most popular stock in this table. On the other hand Lloyds Banking Group PLC (NYSE:LYG) is the least popular one with only 5 bullish hedge fund positions. Ford Motor Company (NYSE:F) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for F is 66.8. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on F as the stock returned 46% since the end of Q4 (through 3/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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