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 900 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 Regions Financial Corporation (NYSE:RF), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Regions Financial Corporation (NYSE:RF) was in 33 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 47. RF has seen an increase in enthusiasm from smart money lately. There were 32 hedge funds in our database with RF holdings at the end of March. Our calculations also showed that RF isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. 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 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Joe Huber of Huber Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Now let’s take a look at the new hedge fund action surrounding Regions Financial Corporation (NYSE:RF).
Do Hedge Funds Think RF Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the previous quarter. On the other hand, there were a total of 26 hedge funds with a bullish position in RF 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 upping their stakes substantially (or already accumulated large positions).
Among these funds, Pzena Investment Management held the most valuable stake in Regions Financial Corporation (NYSE:RF), which was worth $77.3 million at the end of the second quarter. On the second spot was Citadel Investment Group which amassed $30.7 million worth of shares. Two Sigma Advisors, Millennium Management, and Forest Hill 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 Forest Hill Capital allocated the biggest weight to Regions Financial Corporation (NYSE:RF), around 3.1% of its 13F portfolio. TwinBeech Capital is also relatively very bullish on the stock, designating 0.63 percent of its 13F equity portfolio to RF.
As industrywide interest jumped, some big names have been driving this bullishness. MSDC Management, managed by Marc Lisker, Glenn Fuhrman and John Phelan, created the most valuable position in Regions Financial Corporation (NYSE:RF). MSDC Management had $2.1 million invested in the company at the end of the quarter. Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management also made a $1.9 million investment in the stock during the quarter. The other funds with brand new RF positions are Alec Litowitz and Ross Laser’s Magnetar Capital, Joe Huber’s Huber Capital Management, and Karim Abbadi and Edward McBride’s Centiva Capital.
Let’s go over hedge fund activity in other stocks similar to Regions Financial Corporation (NYSE:RF). We will take a look at Cenovus Energy Inc (NYSE:CVE), Just Eat Takeaway.com N.V. (NASDAQ:GRUB), Mid America Apartment Communities Inc (NYSE:MAA), Coupa Software Incorporated (NASDAQ:COUP), KB Financial Group, Inc. (NYSE:KB), Bio-Rad Laboratories, Inc. (NYSE:BIO), and Live Nation Entertainment, Inc. (NYSE:LYV). All of these stocks’ market caps are similar to RF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CVE | 32 | 562772 | 9 |
| GRUB | 24 | 609889 | -11 |
| MAA | 14 | 79867 | -11 |
| COUP | 54 | 4697937 | 4 |
| KB | 8 | 26390 | -1 |
| BIO | 41 | 1292583 | -3 |
| LYV | 40 | 881860 | 3 |
| Average | 30.4 | 1164471 | -1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.4 hedge funds with bullish positions and the average amount invested in these stocks was $1164 million. That figure was $243 million in RF’s case. Coupa Software Incorporated (NASDAQ:COUP) is the most popular stock in this table. On the other hand KB Financial Group, Inc. (NYSE:KB) is the least popular one with only 8 bullish hedge fund positions. Regions Financial Corporation (NYSE:RF) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RF is 54.2. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on RF as the stock returned 12.1% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Regions Financial Corp (NYSE:RF)
Follow Regions Financial Corp (NYSE:RF)
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Disclosure: None. This article was originally published at Insider Monkey.
