The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Vodafone Group Plc (NASDAQ:VOD) based on those filings.
Is VOD a good stock to buy now? Vodafone Group Plc (NASDAQ:VOD) was in 22 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 27. VOD investors should pay attention to an increase in hedge fund interest in recent months. There were 16 hedge funds in our database with VOD positions at the end of the second quarter. Our calculations also showed that VOD isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Steven Tananbaum of GoldenTree Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind let’s take a look at the key hedge fund action encompassing Vodafone Group Plc (NASDAQ:VOD).
Do Hedge Funds Think VOD Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 38% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in VOD over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Vodafone Group Plc (NASDAQ:VOD), which was worth $530 million at the end of the third quarter. On the second spot was GoldenTree Asset Management which amassed $118.6 million worth of shares. Levin Easterly Partners, GoldenTree Asset Management, and TOMS Capital 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 GoldenTree Asset Management allocated the biggest weight to Vodafone Group Plc (NASDAQ:VOD), around 10.46% of its 13F portfolio. GoldenTree Asset Management is also relatively very bullish on the stock, earmarking 3.07 percent of its 13F equity portfolio to VOD.
As industrywide interest jumped, key money managers were breaking ground themselves. Schonfeld Strategic Advisors, managed by Ryan Tolkin (CIO), created the most valuable position in Vodafone Group Plc (NASDAQ:VOD). Schonfeld Strategic Advisors had $2.8 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $0.5 million position during the quarter. The other funds with new positions in the stock are D. E. Shaw’s D E Shaw, Greg Eisner’s Engineers Gate Manager, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s now take a look at hedge fund activity in other stocks similar to Vodafone Group Plc (NASDAQ:VOD). These stocks are Twilio Inc. (NYSE:TWLO), ConocoPhillips (NYSE:COP), Twitter Inc (NYSE:TWTR), Cintas Corporation (NASDAQ:CTAS), Southern Copper Corporation (NYSE:SCCO), Dow Inc. (NYSE:DOW), and NXP Semiconductors NV (NASDAQ:NXPI). This group of stocks’ market values resemble VOD’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TWLO | 71 | 3474887 | 5 |
| COP | 45 | 828871 | 1 |
| TWTR | 75 | 2151017 | 7 |
| CTAS | 38 | 741729 | 4 |
| SCCO | 27 | 347458 | 8 |
| DOW | 42 | 512456 | 7 |
| NXPI | 68 | 1636793 | 1 |
| Average | 52.3 | 1384744 | 4.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 52.3 hedge funds with bullish positions and the average amount invested in these stocks was $1385 million. That figure was $677 million in VOD’s case. Twitter Inc (NYSE:TWTR) is the most popular stock in this table. On the other hand Southern Copper Corporation (NYSE:SCCO) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks Vodafone Group Plc (NASDAQ:VOD) is even less popular than SCCO. Our overall hedge fund sentiment score for VOD is 34.4. 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. Hedge funds clearly dropped the ball on VOD as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on VOD as the stock returned 29.2% since Q3 (through December 14th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
