Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts, usually don’t make them change their opinion towards a company. This time it may be different. During the fourth quarter of 2018 we observed increased volatility and small-cap stocks underperformed the market. Things completely reversed during the first quarter. Hedge fund investor letters indicated that they are cutting their overall exposure, closing out some position and doubling down on others. Let’s take a look at the hedge fund sentiment towards Zions Bancorporation (NASDAQ:ZION) to find out whether it was one of their high conviction long-term ideas.
Is Zions Bancorporation (NASDAQ:ZION) a buy here? Money managers are in an optimistic mood. The number of bullish hedge fund positions moved up by 2 lately. Our calculations also showed that ZION isn’t among the 30 most popular stocks among hedge funds. ZION was in 44 hedge funds’ portfolios at the end of March. There were 42 hedge funds in our database with ZION positions at the end of the previous quarter.
To the average investor there are a lot of gauges market participants employ to assess publicly traded companies. A pair of the less known gauges are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the top picks of the elite fund managers can beat the broader indices by a solid margin (see the details here).
We’re going to take a gander at the latest hedge fund action surrounding Zions Bancorporation (NASDAQ:ZION).
Hedge fund activity in Zions Bancorporation (NASDAQ:ZION)
At Q1’s end, a total of 44 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from the previous quarter. On the other hand, there were a total of 39 hedge funds with a bullish position in ZION a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Zions Bancorporation (NASDAQ:ZION) was held by Millennium Management, which reported holding $100.9 million worth of stock at the end of March. It was followed by Two Sigma Advisors with a $69.1 million position. Other investors bullish on the company included Highbridge Capital Management, Point72 Asset Management, and Citadel Investment Group.
As aggregate interest increased, some big names have been driving this bullishness. Elizabeth Park Capital Management, managed by Fred Cummings, created the largest position in Zions Bancorporation (NASDAQ:ZION). Elizabeth Park Capital Management had $13.6 million invested in the company at the end of the quarter. Paul Magidson, Jonathan Cohen. And Ostrom Enders’s Castine Capital Management also initiated a $7.6 million position during the quarter. The other funds with new positions in the stock are Anand Parekh’s Alyeska Investment Group, Bart Baum’s Ionic Capital Management, and D. E. Shaw’s D E Shaw.
Let’s now review hedge fund activity in other stocks similar to Zions Bancorporation (NASDAQ:ZION). These stocks are Woori Financial Group Inc. (NYSE:WF), ON Semiconductor Corporation (NASDAQ:ON), HollyFrontier Corporation (NYSE:HFC), and Nielsen Holdings plc (NYSE:NLSN). This group of stocks’ market caps resemble ZION’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WF | 1 | 997 | -1 |
| ON | 39 | 660556 | 10 |
| HFC | 25 | 827449 | 0 |
| NLSN | 33 | 1273283 | -2 |
| Average | 24.5 | 690571 | 1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.5 hedge funds with bullish positions and the average amount invested in these stocks was $691 million. That figure was $631 million in ZION’s case. ON Semiconductor Corporation (NASDAQ:ON) is the most popular stock in this table. On the other hand Woori Financial Group Inc. (NYSE:WF) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Zions Bancorporation (NASDAQ:ZION) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately ZION wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on ZION were disappointed as the stock returned -2.6% during the same period 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 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
