In this article you are going to find out whether hedge funds think V.F. Corporation (NYSE:VFC) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is V.F. Corporation (NYSE:VFC) ready to rally soon? Investors who are in the know are in a bearish mood. The number of bullish hedge fund positions dropped by 10 recently. Our calculations also showed that VFC 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). VFC was in 19 hedge funds’ portfolios at the end of March. There were 29 hedge funds in our database with VFC positions at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
At the moment there are a lot of methods stock traders use to size up their stock investments. Some of the most innovative methods are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the top money managers can outperform the S&P 500 by a significant margin (see the details here).
Ric Dillon of Diamond Hill Capital
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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. Keeping this in mind we’re going to go over the new hedge fund action surrounding V.F. Corporation (NYSE:VFC).
What does smart money think about V.F. Corporation (NYSE:VFC)?
Heading into the second quarter of 2020, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -34% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards VFC over the last 18 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in V.F. Corporation (NYSE:VFC) was held by Diamond Hill Capital, which reported holding $63.1 million worth of stock at the end of September. It was followed by AQR Capital Management with a $27.8 million position. Other investors bullish on the company included Arrowstreet Capital, Two Sigma Advisors, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Diamond Hill Capital allocated the biggest weight to V.F. Corporation (NYSE:VFC), around 0.43% of its 13F portfolio. Ayrshire Capital Management is also relatively very bullish on the stock, setting aside 0.4 percent of its 13F equity portfolio to VFC.
Judging by the fact that V.F. Corporation (NYSE:VFC) has faced a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there were a few money managers that decided to sell off their full holdings in the first quarter. It’s worth mentioning that Robert Pohly’s Samlyn Capital sold off the biggest investment of the “upper crust” of funds watched by Insider Monkey, valued at about $114.2 million in stock, and Gregg Moskowitz’s Interval Partners was right behind this move, as the fund cut about $34 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 10 funds in the first quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as V.F. Corporation (NYSE:VFC) but similarly valued. These stocks are ResMed Inc. (NYSE:RMD), PACCAR Inc (NASDAQ:PCAR), Tyson Foods, Inc. (NYSE:TSN), and Ball Corporation (NYSE:BLL). This group of stocks’ market caps match VFC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RMD | 33 | 167543 | 12 |
| PCAR | 38 | 486230 | 2 |
| TSN | 41 | 906465 | -17 |
| BLL | 41 | 697826 | -3 |
| Average | 38.25 | 564516 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.25 hedge funds with bullish positions and the average amount invested in these stocks was $565 million. That figure was $171 million in VFC’s case. Tyson Foods, Inc. (NYSE:TSN) is the most popular stock in this table. On the other hand ResMed Inc. (NYSE:RMD) is the least popular one with only 33 bullish hedge fund positions. Compared to these stocks V.F. Corporation (NYSE:VFC) is even less popular than RMD. Hedge funds dodged a bullet by taking a bearish stance towards VFC. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but managed to beat the market by 15.9 percentage points. Unfortunately VFC wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); VFC investors were disappointed as the stock returned 16.6% during the second quarter (through June 22nd) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Follow V F Corp (NYSE:VFC)
Follow V F Corp (NYSE:VFC)
Disclosure: None. This article was originally published at Insider Monkey.
