Is ICICI Bank Limited (IBN) A Good Stock To Buy?

As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about ICICI Bank Limited (NYSE:IBN).

ICICI Bank Limited (NYSE:IBN) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 28 hedge funds’ portfolios at the end of September. Our calculations also showed that IBN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). At the end of this article we will also compare IBN to other stocks including Illinois Tool Works Inc. (NYSE:ITW), Regeneron Pharmaceuticals Inc (NASDAQ:REGN), and Intercontinental Exchange Inc (NYSE:ICE) to get a better sense of its popularity.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s go over the latest hedge fund action encompassing ICICI Bank Limited (NYSE:IBN).

Robert Pohly of Samlyn Capital

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

Heading into the fourth quarter of 2021, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards IBN over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Lone Pine Capital was the largest shareholder of ICICI Bank Limited (NYSE:IBN), with a stake worth $750.1 million reported as of the end of September. Trailing Lone Pine Capital was GQG Partners, which amassed a stake valued at $530.6 million. Viking Global, Samlyn Capital, and Alua Capital Management 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 Dalton Investments allocated the biggest weight to ICICI Bank Limited (NYSE:IBN), around 29.08% of its 13F portfolio. Alua Capital Management is also relatively very bullish on the stock, earmarking 11.98 percent of its 13F equity portfolio to IBN.

Since ICICI Bank Limited (NYSE:IBN) has faced falling interest from hedge fund managers, it’s easy to see that there is a sect of money managers that elected to cut their full holdings last quarter. At the top of the heap, Renaissance Technologies dropped the biggest investment of the “upper crust” of funds followed by Insider Monkey, comprising close to $12.4 million in stock, and Frank Fu’s CaaS Capital was right behind this move, as the fund cut about $0.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to ICICI Bank Limited (NYSE:IBN). We will take a look at Illinois Tool Works Inc. (NYSE:ITW), Regeneron Pharmaceuticals Inc (NASDAQ:REGN), Intercontinental Exchange Inc (NYSE:ICE), Bank of Montreal (NYSE:BMO), Aon plc (NYSE:AON), Colgate-Palmolive Company (NYSE:CL), and Illumina, Inc. (NASDAQ:ILMN). All of these stocks’ market caps resemble IBN’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 42.7 hedge funds with bullish positions and the average amount invested in these stocks was $2300 million. That figure was $2621 million in IBN’s case. Illumina, Inc. (NASDAQ:ILMN) is the most popular stock in this table. On the other hand Bank of Montreal (NYSE:BMO) is the least popular one with only 12 bullish hedge fund positions. ICICI Bank Limited (NYSE:IBN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IBN is 48.3. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately IBN wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); IBN investors were disappointed as the stock returned 6% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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