We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article, we look at what those funds think of Shinhan Financial Group Co., Ltd. (NYSE:SHG) based on that data.
Is Shinhan Financial Group Co., Ltd. (NYSE:SHG) a buy, sell, or hold? Investors who are in the know are buying. The number of long hedge fund bets inched up by 5 in recent months. Our calculations also showed that SHG isn’t among the 30 most popular stocks among hedge funds. SHG was in 7 hedge funds’ portfolios at the end of the fourth quarter of 2018. There were 2 hedge funds in our database with SHG positions at the end of the previous quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a peek at the fresh hedge fund action surrounding Shinhan Financial Group Co., Ltd. (NYSE:SHG).
What have hedge funds been doing with Shinhan Financial Group Co., Ltd. (NYSE:SHG)?
At Q4’s end, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 250% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SHG over the last 14 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the number one position in Shinhan Financial Group Co., Ltd. (NYSE:SHG), worth close to $11.3 million, comprising less than 0.1%% of its total 13F portfolio. Coming in second is Richard S. Pzena of Pzena Investment Management, with a $5.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish consist of Paul Marshall and Ian Wace’s Marshall Wace LLP, D. E. Shaw’s D E Shaw and Jim Simons’s Renaissance Technologies.
As aggregate interest increased, specific money managers were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, created the largest position in Shinhan Financial Group Co., Ltd. (NYSE:SHG). Arrowstreet Capital had $11.3 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $1.6 million investment in the stock during the quarter. The other funds with brand new SHG positions are D. E. Shaw’s D E Shaw, Jim Simons’s Renaissance Technologies, and Ken Griffin’s Citadel Investment Group.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Shinhan Financial Group Co., Ltd. (NYSE:SHG) but similarly valued. These stocks are Teva Pharmaceutical Industries Limited (NYSE:TEVA), Expedia Group, Inc. (NASDAQ:EXPE), Align Technology, Inc. (NASDAQ:ALGN), and KB Financial Group, Inc. (NYSE:KB). This group of stocks’ market valuations resemble SHG’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TEVA | 35 | 2006034 | -1 |
| EXPE | 39 | 2211902 | 2 |
| ALGN | 37 | 1436721 | 0 |
| KB | 6 | 49264 | 2 |
| Average | 29.25 | 1425980 | 0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.25 hedge funds with bullish positions and the average amount invested in these stocks was $1426 million. That figure was $22 million in SHG’s case. Expedia Group, Inc. (NASDAQ:EXPE) 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 6 bullish hedge fund positions. Shinhan Financial Group Co., Ltd. (NYSE:SHG) is not the least popular stock in this group and 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. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Unfortunately SHG wasn’t in this group. Hedge funds that bet on SHG were disappointed as the stock returned 8.1% and underperformed the market. If you are interested in investing in large cap stocks, you should check out the top 15 hedge fund stocks as 13 of these outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.
