Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Wintrust Financial Corporation (NASDAQ:WTFC), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Wintrust Financial Corporation (NASDAQ:WTFC) worth your attention right now? Prominent investors are turning less bullish. The number of long hedge fund positions fell by 4 lately. Our calculations also showed that WTFC isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). WTFC was in 19 hedge funds’ portfolios at the end of September. There were 23 hedge funds in our database with WTFC holdings at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most traders, hedge funds are viewed as underperforming, outdated investment vehicles of the past. While there are more than 8000 funds trading at the moment, Our researchers choose to focus on the bigwigs of this group, around 750 funds. Most estimates calculate that this group of people manage bulk of the smart money’s total asset base, and by monitoring their top equity investments, Insider Monkey has uncovered various investment strategies that have historically outrun the market. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Ken Fisher of Fisher Asset Management
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a look at the fresh hedge fund action encompassing Wintrust Financial Corporation (NASDAQ:WTFC).
How are hedge funds trading Wintrust Financial Corporation (NASDAQ:WTFC)?
At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from the second quarter of 2019. By comparison, 24 hedge funds held shares or bullish call options in WTFC a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
Among these funds, Citadel Investment Group held the most valuable stake in Wintrust Financial Corporation (NASDAQ:WTFC), which was worth $77.2 million at the end of the third quarter. On the second spot was Millennium Management which amassed $46.7 million worth of shares. D E Shaw, AQR Capital Management, and Fisher Asset 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 Basswood Capital allocated the biggest weight to Wintrust Financial Corporation (NASDAQ:WTFC), around 0.81% of its 13F portfolio. EJF Capital is also relatively very bullish on the stock, designating 0.75 percent of its 13F equity portfolio to WTFC.
Due to the fact that Wintrust Financial Corporation (NASDAQ:WTFC) has experienced falling interest from the smart money, we can see that there were a few fund managers who sold off their positions entirely in the third quarter. Intriguingly, Ravi Chopra’s Azora Capital dumped the biggest stake of all the hedgies tracked by Insider Monkey, worth about $30.6 million in stock. Gregg Moskowitz’s fund, Interval Partners, also said goodbye to its stock, about $12.3 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 4 funds in the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Wintrust Financial Corporation (NASDAQ:WTFC) but similarly valued. These stocks are ACI Worldwide Inc (NASDAQ:ACIW), Texas Roadhouse Inc (NASDAQ:TXRH), YPF Sociedad Anonima (NYSE:YPF), and Pebblebrook Hotel Trust (NYSE:PEB). This group of stocks’ market caps match WTFC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ACIW | 21 | 295588 | -2 |
| TXRH | 22 | 225889 | -1 |
| YPF | 18 | 99931 | 3 |
| PEB | 12 | 104562 | -1 |
| Average | 18.25 | 181493 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $181 million. That figure was $285 million in WTFC’s case. Texas Roadhouse Inc (NASDAQ:TXRH) is the most popular stock in this table. On the other hand Pebblebrook Hotel Trust (NYSE:PEB) is the least popular one with only 12 bullish hedge fund positions. Wintrust Financial Corporation (NASDAQ:WTFC) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately WTFC wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on WTFC were disappointed as the stock returned 5.5% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
