Is Ford Motor Company (NYSE:F) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. 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 find the latest market-moving information.
Ford Motor Company (NYSE:F) was included in the 13F portfolios of 32 investors tracked by Insider Monkey at the end of September. The company witnessed a slight increase in support from smart money investors during the third quarter, as there had been 31 hedge funds bullish on Ford at the end of June. At the end of this article we will also compare Ford to other stocks including Kimberly Clark Corp (NYSE:KMB), The Southern Company (NYSE:SO), and American Tower Corp (NYSE:AMT) to get a better sense of its popularity.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, we’re going to take a peek at the recent action regarding Ford Motor Company (NYSE:F).
Hedge fund activity in Ford Motor Company (NYSE:F)
During the third quarter, the number of funds tracked by Insider Monkey that held long Positions in Ford Motor Company (NYSE:F) inched up by 3% to 32. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Richard S. Pzena’s Pzena Investment Management holds the largest position in Ford Motor Company (NYSE:F). Pzena Investment Management has a $210.3 million position in the stock, comprising 1.3% of its 13F portfolio. The second largest stake is held by Ric Dillon’s Diamond Hill Capital, with a $146.5 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism include Phill Gross and Robert Atchinson’s Adage Capital Management, Cliff Asness’ AQR Capital Management, and David Harding’s Winton Capital Management.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the largest position in Ford Motor Company (NYSE:F). Arrowstreet Capital had $41.4 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $16.4 million investment in the stock during the third quarter. The following funds were also among the new F investors: Jim Simons’s Renaissance Technologies, Glenn Russell Dubin’s Highbridge Capital Management, and Benjamin A. Smith’s Laurion Capital Management.
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 Kimberly Clark Corp (NYSE:KMB), The Southern Company (NYSE:SO), American Tower Corp (NYSE:AMT), and UBS AG (USA) (NYSE:UBS). This group of stocks’ market valuations resemble Ford Motor Company’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KMB | 29 | 1420992 | 7 |
| SO | 20 | 568071 | -1 |
| AMT | 48 | 2928784 | -1 |
| UBS | 8 | 659901 | -2 |
As you can see these stocks had an average of 26 funds with bullish positions and the average amount invested in these stocks was $1.394 billion at the end of September. That figure was $684 million in Ford’s case. American Tower Corp (NYSE:AMT) is the most popular stock in this table. On the other hand UBS AG (USA) (NYSE:UBS) is the least popular one with only eight funds holding shares. Ford Motor Company (NYSE:F) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard American Tower Corp (NYSE:AMT) might be a better candidate to consider a long position.
