Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of Sun Life Financial Inc. (NYSE:SLF) based on that data.
Is Sun Life Financial Inc. (NYSE:SLF) a bargain? The smart money is taking a bearish view. The number of bullish hedge fund bets dropped by 3 recently. SLF was in 10 hedge funds’ portfolios at the end of September. There were 13 hedge funds in our database with SLF positions at the end of the previous quarter. At the end of this article we will also compare SLF to other stocks including Moody’s Corporation (NYSE:MCO), SunTrust Banks, Inc. (NYSE:STI), and Magna International Inc. (NYSE:MGA) to get a better sense of its popularity.
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Today there are plenty of gauges shareholders can use to value their holdings. A pair of the most under-the-radar gauges are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outpace the market by a superb amount (see the details here).
Keeping this in mind, let’s take a peek at the fresh action regarding Sun Life Financial Inc. (NYSE:SLF).
What does the smart money think about Sun Life Financial Inc. (NYSE:SLF)?
Heading into Q4, a total of 10 of the hedge funds tracked by Insider Monkey were long this stock, a change of -23% from the second quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the number one position in Sun Life Financial Inc. (NYSE:SLF), worth close to $39.3 million, corresponding to 0.2% of its total 13F portfolio. On Arrowstreet Capital’s heels is Tetrem Capital Management, managed by Daniel Bubis, which holds a $23.7 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism contain John Overdeck and David Siegel’s Two Sigma Advisors, Israel Englander’s Millennium Management and Cliff Asness’s AQR Capital Management.
Since Sun Life Financial Inc. (NYSE:SLF) has experienced declining sentiment from the smart money, logic holds that there was a specific group of funds who sold off their positions entirely last quarter. Intriguingly, Lawrence Sapanski’s Scoria Capital sold off the largest stake of the “upper crust” of funds tracked by Insider Monkey, totaling an estimated $14.6 million in stock, and Lawrence Sapanski’s Scoria Capital was right behind this move, as the fund said goodbye to about $9.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 3 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Sun Life Financial Inc. (NYSE:SLF) but similarly valued. These stocks are Moody’s Corporation (NYSE:MCO), SunTrust Banks, Inc. (NYSE:STI), Magna International Inc. (NYSE:MGA), and Royal Caribbean Cruises Ltd. (NYSE:RCL). This group of stocks’ market values resemble SLF’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MCO | 31 | 3453664 | 3 |
| STI | 45 | 524026 | 7 |
| MGA | 43 | 1329836 | -9 |
| RCL | 41 | 1193859 | -2 |
As you can see these stocks had an average of 40 hedge funds with bullish positions and the average amount invested in these stocks was $1,625 million. That figure was $77 million in SLF’s case. SunTrust Banks, Inc. (NYSE:STI) is the most popular stock in this table. On the other hand Moody’s Corporation (NYSE:MCO) is the least popular one with only 31 bullish hedge fund positions. Compared to these stocks Sun Life Financial Inc. (NYSE:SLF) is even less popular than MCO. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
