Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of The Interpublic Group of Companies Inc (NYSE:IPG) based on that data.
Is IPG a good stock to buy? Hedge fund interest in The Interpublic Group of Companies Inc (NYSE:IPG) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that IPG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). 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 monday.com Ltd. (NASDAQ:MNDY), Equity Lifestyle Properties, Inc. (NYSE:ELS), and RH (NYSE:RH) to gather more data points.
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 analyze the latest hedge fund action encompassing The Interpublic Group of Companies Inc (NYSE:IPG).
Richard S. Pzena of Pzena Investment Management
Do Hedge Funds Think IPG Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. By comparison, 31 hedge funds held shares or bullish call options in IPG a year ago. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
More specifically, Ariel Investments was the largest shareholder of The Interpublic Group of Companies Inc (NYSE:IPG), with a stake worth $316.2 million reported as of the end of September. Trailing Ariel Investments was Citadel Investment Group, which amassed a stake valued at $66.4 million. Junto Capital Management, GAMCO Investors, and Pzena Investment 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 Zeno Research allocated the biggest weight to The Interpublic Group of Companies Inc (NYSE:IPG), around 4.7% of its 13F portfolio. Ariel Investments is also relatively very bullish on the stock, earmarking 2.89 percent of its 13F equity portfolio to IPG.
Judging by the fact that The Interpublic Group of Companies Inc (NYSE:IPG) has witnessed declining sentiment from hedge fund managers, it’s easy to see that there was a specific group of money managers that elected to cut their positions entirely heading into Q4. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management dropped the largest position of the “upper crust” of funds tracked by Insider Monkey, totaling an estimated $34.4 million in stock, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners was right behind this move, as the fund said goodbye to about $1.2 million worth. These moves 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 similar to The Interpublic Group of Companies Inc (NYSE:IPG). These stocks are monday.com Ltd. (NASDAQ:MNDY), Equity Lifestyle Properties, Inc. (NYSE:ELS), RH (NYSE:RH), Evergy, Inc. (NYSE:EVRG), Vedanta Ltd (NYSE:VEDL), SentinelOne, Inc. (NYSE:S), and Cognex Corporation (NASDAQ:CGNX). This group of stocks’ market values are similar to IPG’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MNDY | 17 | 495191 | -2 |
| ELS | 25 | 462091 | 0 |
| RH | 57 | 4990440 | 3 |
| EVRG | 25 | 908059 | 4 |
| VEDL | 8 | 25575 | -2 |
| S | 35 | 2234141 | -32 |
| CGNX | 34 | 428413 | -1 |
| Average | 28.7 | 1363416 | -4.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.7 hedge funds with bullish positions and the average amount invested in these stocks was $1363 million. That figure was $643 million in IPG’s case. RH (NYSE:RH) is the most popular stock in this table. On the other hand Vedanta Ltd (NYSE:VEDL) is the least popular one with only 8 bullish hedge fund positions. The Interpublic Group of Companies Inc (NYSE:IPG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IPG is 52.9. 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 positive signal but 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately IPG wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on IPG were disappointed as the stock returned -8.8% since the end of September (through 11/30) 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 many of these stocks already outperformed the market since 2019.
Follow Interpublic Group Of Companies Inc. (NYSE:IPG)
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Disclosure: None. This article was originally published at Insider Monkey.
