Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Valeant and SunEdison, have not done well during the last 12 months due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average. The top 30 mid-cap stocks (market caps between $1 billion and $10 billion) among hedge funds delivered an average return of 18% during the last four quarters. S&P 500 Index returned only 7.6% during the same period and less than 49% of its constituents managed to beat this return. Because their consensus picks have done well, we pay attention to what elite funds and billionaire investors think before doing extensive research on a stock. In this article, we take a closer look at SunTrust Banks, Inc. (NYSE:STI) from the perspective of those elite funds.
Overall, there were 31 funds from our database long SunTrust Banks at the end of September, up from 31 funds a quarter earlier. Further below, we’ll take a closer look at how investors traded the stock heading into the fourth quarter. Moreover, at the end of this article we will also compare STI to other stocks including Campbell Soup Company (NYSE:CPB), TE Connectivity Ltd. (NYSE:TEL), and Boston Properties, Inc. (NYSE:BXP) to get a better sense of its popularity.
Follow Suntrust Banks Inc (NYSE:STI)
Follow Suntrust Banks Inc (NYSE:STI)
To the average investor there are a multitude of metrics stock traders use to value their stock investments. A pair of the best metrics are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the top fund managers can outpace the S&P 500 by a very impressive margin (see the details here).
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Now, let’s take a peek at the latest action regarding SunTrust Banks, Inc. (NYSE:STI).
How have hedgies been trading SunTrust Banks, Inc. (NYSE:STI)?
Heading into the fourth quarter of 2016, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 3% from one quarter earlier. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Cliff Asness’ AQR Capital Management has the most valuable position in SunTrust Banks, Inc. (NYSE:STI), worth close to $239.8 million, comprising 0.4% of its total 13F portfolio. The second largest stake is held by Ken Griffin’s Citadel Investment Group, with a $206.6 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other professional money managers with similar optimism consist of Emanuel J. Friedman’s EJF Capital and Joe Huber’s Huber Capital Management.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Carlson Capital, managed by Clint Carlson, assembled the biggest position in SunTrust Banks, Inc. (NYSE:STI). Carlson Capital had $55.1 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also made a $22.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Glenn Russell Dubin’s Highbridge Capital Management and Solomon Kumin’s Folger Hill Asset Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as SunTrust Banks, Inc. (NYSE:STI) but similarly valued. These stocks are Campbell Soup Company (NYSE:CPB), TE Connectivity Ltd. (NYSE:TEL), Boston Properties, Inc. (NYSE:BXP), and Sun Life Financial Inc. (USA) (NYSE:SLF). This group of stocks’ market values match STI’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CPB | 27 | 290828 | -2 |
| TEL | 23 | 869744 | -2 |
| BXP | 17 | 404364 | -1 |
| SLF | 13 | 76979 | 3 |
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $410 million. That figure was $693 million in STI’s case. With 27 funds holding its shares, Campbell Soup Company (NYSE:CPB) is the most popular stock in this table. On the other hand Sun Life Financial Inc. (USA) (NYSE:SLF) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks SunTrust Banks, Inc. (NYSE:STI) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
