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Target Corporation (NYSE:TGT) shareholders have witnessed a decrease in activity from the world’s largest hedge funds of late. Target Corporation (NYSE:TGT) was in 49 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 78. There were 66 hedge funds in our database with TGT holdings at the end of June. Our calculations also showed that TGT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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. With all of this in mind let’s go over the new hedge fund action surrounding Target Corporation (NYSE:TGT).
Cliff Asness of AQR Capital Management
Do Hedge Funds Think TGT Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 49 of the hedge funds tracked by Insider Monkey were long this stock, a change of -26% from the previous quarter. By comparison, 57 hedge funds held shares or bullish call options in TGT a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Rajiv Jain’s GQG Partners has the most valuable position in Target Corporation (NYSE:TGT), worth close to $1.2595 billion, accounting for 3.4% of its total 13F portfolio. Coming in second is Renaissance Technologies, which holds a $706 million position; the fund has 0.9% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish comprise Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Cliff Asness’s AQR Capital Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Rip Road Capital allocated the biggest weight to Target Corporation (NYSE:TGT), around 5.32% of its 13F portfolio. GQG Partners is also relatively very bullish on the stock, setting aside 3.45 percent of its 13F equity portfolio to TGT.
Because Target Corporation (NYSE:TGT) has experienced declining sentiment from hedge fund managers, it’s easy to see that there was a specific group of hedgies who sold off their positions entirely in the third quarter. Intriguingly, John Overdeck and David Siegel’s Two Sigma Advisors said goodbye to the biggest investment of the “upper crust” of funds watched by Insider Monkey, valued at an estimated $263.8 million in stock, and Brandon Haley’s Holocene Advisors was right behind this move, as the fund sold off about $182.4 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 17 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks similar to Target Corporation (NYSE:TGT). We will take a look at Anheuser-Busch InBev SA/NV (NYSE:BUD), Square, Inc. (NYSE:SQ), The Estee Lauder Companies Inc (NYSE:EL), Rio Tinto Group (NYSE:RIO), HSBC Holdings plc (NYSE:HSBC), Caterpillar Inc. (NYSE:CAT), and Deere & Company (NYSE:DE). This group of stocks’ market caps match TGT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BUD | 11 | 826303 | -7 |
| SQ | 98 | 8884931 | 4 |
| EL | 49 | 4137243 | -1 |
| RIO | 20 | 1330364 | -1 |
| HSBC | 10 | 196426 | -1 |
| CAT | 46 | 4778511 | -16 |
| DE | 54 | 2530736 | 2 |
| Average | 41.1 | 3240645 | -2.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 41.1 hedge funds with bullish positions and the average amount invested in these stocks was $3241 million. That figure was $4350 million in TGT’s case. Square, Inc. (NYSE:SQ) is the most popular stock in this table. On the other hand HSBC Holdings plc (NYSE:HSBC) is the least popular one with only 10 bullish hedge fund positions. Target Corporation (NYSE:TGT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TGT is 29. 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. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on TGT as the stock returned 7% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
