JPMorgan Chase & Co. (NYSE:JPM)’s private bank announced another round of approximately 100 layoffs, the Wall Street Journal reported on Monday, citing people familiar with the matter. The layoffs are a part of JPMogran’s restructuring strategy regarding its private bank. The decision was announced internally. The source added that the bank fires underperformers every year, and continues to actively hire, as well. JPMorgan’s stock has inched up on the back of the news, slightly offsetting the year-to-date decline, which currently stands at 2.30%. This should be good news for hedge funds that had been bullish on the stock, most of whom maintained their positions during the first quarter.
The 750+ 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, fixed typos and other more significant errors 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 JPMorgan Chase & Co. (NYSE:JPM). The number of bullish hedge fund positions was cut by three in recent months and a total of 97 of the hedge funds tracked by Insider Monkey were long this stock at the end of March. However, 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 The Coca-Cola Company (NYSE:KO), Anheuser-Busch InBev NV (ADR) (NYSE:BUD), and Alibaba Group Holding Ltd (NYSE:BABA) to gather more data points.
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To most investors, hedge funds are viewed as slow, old investment vehicles of years past. While there are more than 8000 funds in operation today, We hone in on the moguls of this group, around 700 funds. These investment experts command the lion’s share of the smart money’s total asset base, and by following their best equity investments, Insider Monkey has spotted several investment strategies that have historically beaten the market. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Lansdowne Partners, managed by Alex Snow, holds the largest position in JPMorgan Chase & Co. (NYSE:JPM). Lansdowne Partners has a $1.3706 billion position in the stock, comprising 10.8% of its 13F portfolio. Sitting at the No. 2 spot is Ken Fisher of Fisher Asset Management, with a $866.2 million position; 1.6% of its 13F portfolio is allocated to the company. Other members of the smart money that are bullish include Boykin Curry’s Eagle Capital Management, Edgar Wachenheim’s Greenhaven Associates and Richard S. Pzena’s Pzena Investment Management.
On the following page, we are going to take a look at the funds that chose to unload their positions in JPMorgan Chase during the first three months of 2016.
Due to the fact that JPMorgan Chase & Co. (NYSE:JPM) has witnessed declining sentiment from the smart money, it’s safe to say that there was a specific group of fund managers that decided to sell off their full holdings heading into Q2. It’s worth mentioning that Neil Chriss’s Hutchin Hill Capital sold off the biggest position of the “upper crust” of funds tracked by Insider Monkey, worth close to $127.5 million in stock. Bill Miller’s fund, Legg Mason Capital Management, also cut its stock, about $125.3 million worth. These moves are important to note, as total hedge fund interest was cut by 3 funds heading into Q2.
Let’s now take a look at hedge fund activity in other stocks similar to JPMorgan Chase & Co. (NYSE:JPM). We will take a look at The Coca-Cola Company (NYSE:KO), Anheuser-Busch InBev NV (ADR) (NYSE:BUD), Alibaba Group Holding Ltd (NYSE:BABA), and Pfizer Inc. (NYSE:PFE). This group of stocks’ market caps are closest to JPM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KO | 62 | 22808591 | 11 |
| BUD | 32 | 5146091 | -4 |
| BABA | 67 | 5139777 | -10 |
| PFE | 119 | 8371790 | 10 |
As you can see these stocks had an average of 70 hedge funds with bullish positions and the average amount invested in these stocks was $10367 million. That figure was $6932 million in JPM’s case. Pfizer Inc. (NYSE:PFE) is the most popular stock in this table. On the other hand Anheuser-Busch InBev NV (ADR) (NYSE:BUD) is the least popular one with only 32 bullish hedge fund positions. JPMorgan Chase & Co. (NYSE:JPM) 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. In this regard PFE might be a better candidate to consider a long position.
Disclosure: None
