After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of December 31. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Ford Motor Company (NYSE:F).
Is Ford Motor Company (NYSE:F) the right investment to pursue these days? Investors who are in the know are getting more bullish. The number of long hedge fund positions rose by 3 in recent months. Our calculations also showed that F isn’t among the 30 most popular stocks among hedge funds. F was in 33 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 30 hedge funds in our database with F holdings at the end of the previous quarter.
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 has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s analyze the key hedge fund action surrounding Ford Motor Company (NYSE:F).
Hedge fund activity in Ford Motor Company (NYSE:F)
At the end of the fourth quarter, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the second quarter of 2018. On the other hand, there were a total of 30 hedge funds with a bullish position in F a year ago. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
More specifically, Pzena Investment Management was the largest shareholder of Ford Motor Company (NYSE:F), with a stake worth $328.8 million reported as of the end of September. Trailing Pzena Investment Management was Greenhaven Associates, which amassed a stake valued at $250.8 million. Arrowstreet Capital, Citadel Investment Group, and D E Shaw were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, specific money managers have been driving this bullishness. Gotham Asset Management, managed by Joel Greenblatt, created the most outsized position in Ford Motor Company (NYSE:F). Gotham Asset Management had $14.4 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also initiated a $9.4 million position during the quarter. The other funds with brand new F positions are Boaz Weinstein’s Saba Capital, David Costen Haley’s HBK Investments, and Peter S. Stamos’s Stamos Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Ford Motor Company (NYSE:F) but similarly valued. These stocks are JD.Com Inc (NASDAQ:JD), BT Group plc (NYSE:BT), Canon Inc. (NYSE:CAJ), and Eaton Corporation plc (NYSE:ETN). All of these stocks’ market caps are similar to F’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JD | 34 | 2227256 | 2 |
| BT | 9 | 17627 | 3 |
| CAJ | 6 | 84612 | -2 |
| ETN | 30 | 668932 | -8 |
| Average | 19.75 | 749607 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $750 million. That figure was $977 million in F’s case. JD.Com Inc (NASDAQ:JD) is the most popular stock in this table. On the other hand Canon Inc. (NYSE:CAJ) is the least popular one with only 6 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Unfortunately Ford wasn’t in this group. Hedge funds that bet on Ford were disappointed as the stock returned 12.1% and underperformed the market. If you are interested in investing in large cap stocks, you should check out the top 15 hedge fund stocks as 13 of these outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.
