The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. In this article we look at what those investors think of Regions Financial Corporation (NYSE:RF).
Regions Financial Corporation (NYSE:RF) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 37 hedge funds’ portfolios at the end of the first quarter of 2020. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Universal Health Services, Inc. (NYSE:UHS), EXACT Sciences Corporation (NASDAQ:EXAS), and Allegion plc (NYSE:ALLE) to gather more data points. Our calculations also showed that RF isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most shareholders, hedge funds are seen as slow, outdated investment vehicles of the past. While there are greater than 8000 funds in operation today, Our experts look at the bigwigs of this club, approximately 850 funds. These money managers preside over the lion’s share of the hedge fund industry’s total capital, and by paying attention to their highest performing picks, Insider Monkey has come up with many investment strategies that have historically outrun Mr. Market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
John Overdeck of Two Sigma Advisors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s go over the latest hedge fund action surrounding Regions Financial Corporation (NYSE:RF).
Hedge fund activity in Regions Financial Corporation (NYSE:RF)
Heading into the second quarter of 2020, a total of 37 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. By comparison, 41 hedge funds held shares or bullish call options in RF a year ago. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Two Sigma Advisors, managed by John Overdeck and David Siegel, holds the most valuable position in Regions Financial Corporation (NYSE:RF). Two Sigma Advisors has a $57 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Richard S. Pzena of Pzena Investment Management, with a $49.2 million position; 0.4% of its 13F portfolio is allocated to the stock. Some other professional money managers that are bullish encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Steve Cohen’s Point72 Asset Management and Dmitry Balyasny’s Balyasny Asset Management. In terms of the portfolio weights assigned to each position Elizabeth Park Capital Management allocated the biggest weight to Regions Financial Corporation (NYSE:RF), around 2.98% of its 13F portfolio. Forest Hill Capital is also relatively very bullish on the stock, designating 2.46 percent of its 13F equity portfolio to RF.
Since Regions Financial Corporation (NYSE:RF) has witnessed declining sentiment from hedge fund managers, we can see that there exists a select few fund managers that elected to cut their entire stakes last quarter. Interestingly, Israel Englander’s Millennium Management said goodbye to the biggest stake of the “upper crust” of funds tracked by Insider Monkey, worth close to $51.3 million in stock. Michael Price’s fund, MFP Investors, also dumped its stock, about $5.4 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Regions Financial Corporation (NYSE:RF) but similarly valued. We will take a look at Universal Health Services, Inc. (NYSE:UHS), EXACT Sciences Corporation (NASDAQ:EXAS), Allegion plc (NYSE:ALLE), and Pinnacle West Capital Corporation (NYSE:PNW). This group of stocks’ market values match RF’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UHS | 30 | 443724 | -1 |
| EXAS | 34 | 514351 | -7 |
| ALLE | 31 | 404344 | 6 |
| PNW | 25 | 923395 | 0 |
| Average | 30 | 571454 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $571 million. That figure was $235 million in RF’s case. EXACT Sciences Corporation (NASDAQ:EXAS) is the most popular stock in this table. On the other hand Pinnacle West Capital Corporation (NYSE:PNW) is the least popular one with only 25 bullish hedge fund positions. Compared to these stocks Regions Financial Corporation (NYSE:RF) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on RF as the stock returned 26.1% so far in Q2 (through the end of May) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Follow Regions Financial Corp (NYSE:RF)
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Disclosure: None. This article was originally published at Insider Monkey.
