The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Wipro Limited (ADR) (NYSE:WIT).
Is Wipro Limited (ADR) (NYSE:WIT) a healthy stock for your portfolio? The smart money is altogether becoming hopeful. The number of long hedge fund bets that are revealed through 13F filings rose by 2 in recent months. 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 Edison International (NYSE:EIX), Equity Residential (NYSE:EQR), and PPL Corporation (NYSE:PPL) to gather more data points.
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We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
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How are hedge funds trading Wipro Limited (ADR) (NYSE:WIT)?
At Q3’s end, a total of 8 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 33% increase from the second quarter of 2016, pushing hedge fund ownership of the stock to a yearly high. Below, you can check out the change in hedge fund sentiment towards WIT over the last 5 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, AQR Capital Management, led by Cliff Asness, holds the number one position in Wipro Limited (ADR) (NYSE:WIT). AQR Capital Management has a $65.6 million position in the stock. Coming in second is Ken Fisher of Fisher Asset Management, with an $18 million position. Some other hedge funds and institutional investors with similar optimism encompass Renaissance Technologies, one of the largest hedge funds in the world, David E. Shaw’s D E Shaw, and Matthew Tewksbury’s Stevens Capital Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds, which is based on the performance of their 13F long positions in non-micro-cap stocks.
With general bullishness amongst the heavyweights, some big names have jumped into Wipro Limited (ADR) (NYSE:WIT) headfirst. Stevens Capital Management assembled the most outsized position in Wipro Limited (ADR) (NYSE:WIT). Stevens Capital Management had $0.5 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $0.4 million investment in the stock during the quarter. The only other fund with a brand new WIT position was Michael Platt and William Reeves’ BlueCrest Capital Mgmt.
Let’s now take a look at hedge fund activity in other stocks similar to Wipro Limited (ADR) (NYSE:WIT). These stocks are Edison International (NYSE:EIX), Equity Residential (NYSE:EQR), PPL Corporation (NYSE:PPL), and Aviva Plc (ADR) (NYSE:AV). This group of stocks’ market values resemble WIT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EIX | 19 | 640459 | -1 |
| EQR | 20 | 794112 | -5 |
| PPL | 22 | 536205 | -4 |
| AV | 5 | 2883 | 1 |
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $493 million. That figure was $105 million in WIT’s case. PPL Corporation (NYSE:PPL) is the most popular stock in this table. On the other hand Aviva Plc (ADR) (NYSE:AV) is the least popular one with only 5 bullish hedge fund positions. Wipro Limited (ADR) (NYSE:WIT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PPL might be a better candidate to consider taking a long position in.
Disclosure: None
