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 September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Hancock Whitney Corporation (NASDAQ:HWC).
Hancock Whitney Corporation (NASDAQ:HWC) has seen an increase in enthusiasm from smart money in recent months. HWC was in 18 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with HWC positions at the end of the previous quarter. Our calculations also showed that HWC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
Matthew Lindenbaum of Basswood Capital
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to view the fresh hedge fund action surrounding Hancock Whitney Corporation (NASDAQ:HWC).
How have hedgies been trading Hancock Whitney Corporation (NASDAQ:HWC)?
Heading into the fourth quarter of 2019, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from one quarter earlier. By comparison, 24 hedge funds held shares or bullish call options in HWC a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Hancock Whitney Corporation (NASDAQ:HWC) was held by Basswood Capital, which reported holding $15.8 million worth of stock at the end of September. It was followed by Castine Capital Management with a $14.7 million position. Other investors bullish on the company included Balyasny Asset Management, Renaissance Technologies, and Forest Hill Capital. In terms of the portfolio weights assigned to each position Castine Capital Management allocated the biggest weight to Hancock Whitney Corporation (NASDAQ:HWC), around 4.01% of its 13F portfolio. Forest Hill Capital is also relatively very bullish on the stock, earmarking 3.37 percent of its 13F equity portfolio to HWC.
As one would reasonably expect, key hedge funds were breaking ground themselves. Basswood Capital, managed by Matthew Lindenbaum, initiated the most valuable position in Hancock Whitney Corporation (NASDAQ:HWC). Basswood Capital had $15.8 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace also initiated a $2.9 million position during the quarter. The other funds with new positions in the stock are Daniel Johnson’s Gillson Capital, Matthew Hulsizer’s PEAK6 Capital Management, and Bruce Kovner’s Caxton Associates.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Hancock Whitney Corporation (NASDAQ:HWC) but similarly valued. These stocks are Associated Banc Corp (NYSE:ASB), Pan American Silver Corp. (NASDAQ:PAAS), Federated Investors Inc (NYSE:FII), and KAR Auction Services Inc (NYSE:KAR). This group of stocks’ market values are closest to HWC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ASB | 20 | 209005 | 1 |
| PAAS | 22 | 328752 | 5 |
| FII | 23 | 213204 | 1 |
| KAR | 30 | 574775 | -2 |
| Average | 23.75 | 331434 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.75 hedge funds with bullish positions and the average amount invested in these stocks was $331 million. That figure was $96 million in HWC’s case. KAR Auction Services Inc (NYSE:KAR) is the most popular stock in this table. On the other hand Associated Banc Corp (NYSE:ASB) is the least popular one with only 20 bullish hedge fund positions. Compared to these stocks Hancock Whitney Corporation (NASDAQ:HWC) is even less popular than ASB. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on HWC, though not to the same extent, as the stock returned 6% during the fourth quarter (through 11/30) and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
