“Market volatility has picked up again over the past few weeks. Headlines highlight risks regarding interest rates, the Fed, China, house prices, auto sales, trade wars, and more. Uncertainty abounds. But doesn’t it always? I have no view on whether the recent volatility will continue for a while, or whether the market will be back at all-time highs before we know it. I remain focused on preserving and growing our capital, and continue to believe that the best way to do so is via a value-driven, concentrated, patient approach. I shun consensus holdings, rich valuations, and market fads, in favor of solid, yet frequently off-the-beaten-path, businesses run by excellent, aligned management teams, purchased at deep discounts to intrinsic value,” are the words of Maran Capital’s Dan Roller. His stock picks have been beating the S&P 500 Index handily. We pay attention to what hedge funds are doing in a particular stock before considering a potential investment because it works for us. So let’s take a glance at the smart money sentiment towards Fulton Financial Corp (NASDAQ:FULT) and see how it was affected.
Is Fulton Financial Corp (NASDAQ:FULT) the right pick for your portfolio? Hedge funds are becoming hopeful. The number of long hedge fund bets increased by 4 recently. Our calculations also showed that FULT isn’t among the 30 most popular stocks among hedge funds. FULT was in 12 hedge funds’ portfolios at the end of the third quarter of 2018. There were 8 hedge funds in our database with FULT positions 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 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Cliff Asness of AQR Capital Management
We’re going to take a peek at the latest hedge fund action encompassing Fulton Financial Corp (NASDAQ:FULT).
How have hedgies been trading Fulton Financial Corp (NASDAQ:FULT)?
Heading into the fourth quarter of 2018, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards FULT over the last 13 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
Among these funds, Azora Capital held the most valuable stake in Fulton Financial Corp (NASDAQ:FULT), which was worth $15.8 million at the end of the third quarter. On the second spot was AQR Capital Management which amassed $9.7 million worth of shares. Moreover, Balyasny Asset Management, Interval Partners, and Millennium Management were also bullish on Fulton Financial Corp (NASDAQ:FULT), allocating a large percentage of their portfolios to this stock.
Now, key money managers were leading the bulls’ herd. Azora Capital, managed by Ravi Chopra, created the largest position in Fulton Financial Corp (NASDAQ:FULT). Azora Capital had $15.8 million invested in the company at the end of the quarter. Gregg Moskowitz’s Interval Partners also made a $3.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Ken Griffin’s Citadel Investment Group, Michael Platt and William Reeves’s BlueCrest Capital Mgmt., and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Fulton Financial Corp (NASDAQ:FULT) but similarly valued. We will take a look at Vishay Intertechnology (NYSE:VSH), Welbilt, Inc. (NYSE:WBT), FirstService Corporation (NASDAQ:FSV), and Sunoco LP (NYSE:SUN). This group of stocks’ market caps are closest to FULT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VSH | 22 | 459952 | 3 |
| WBT | 22 | 813347 | 2 |
| FSV | 13 | 143738 | 4 |
| SUN | 7 | 16705 | -1 |
| Average | 16 | 358436 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $358 million. That figure was $41 million in FULT’s case. Vishay Intertechnology (NYSE:VSH) is the most popular stock in this table. On the other hand Sunoco LP (NYSE:SUN) is the least popular one with only 7 bullish hedge fund positions. Fulton Financial Corp (NASDAQ:FULT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard VSH might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
