The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Citizens Financial Group Inc (NYSE:CFG) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Is Citizens Financial Group Inc (NYSE:CFG) undervalued? Money managers were selling. The number of long hedge fund positions fell by 2 recently. Citizens Financial Group Inc (NYSE:CFG) was in 34 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 67. Our calculations also showed that CFG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 36 hedge funds in our database with CFG holdings at the end of June.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind we’re going to take a gander at the key hedge fund action regarding Citizens Financial Group Inc (NYSE:CFG).
Fred DiSanto of Ancora Advisors
Do Hedge Funds Think CFG Is A Good Stock To Buy Now?
At third quarter’s end, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards CFG over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Citizens Financial Group Inc (NYSE:CFG) was held by Impax Asset Management, which reported holding $37.5 million worth of stock at the end of September. It was followed by AQR Capital Management with a $37.2 million position. Other investors bullish on the company included Hosking Partners, Ancora Advisors, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Soapstone Capital allocated the biggest weight to Citizens Financial Group Inc (NYSE:CFG), around 9.87% of its 13F portfolio. Factorial Partners is also relatively very bullish on the stock, designating 2.96 percent of its 13F equity portfolio to CFG.
Because Citizens Financial Group Inc (NYSE:CFG) has experienced a decline in interest from the smart money, it’s easy to see that there is a sect of money managers that decided to sell off their full holdings by the end of the third quarter. Interestingly, Brandon Haley’s Holocene Advisors cut the largest position of the “upper crust” of funds tracked by Insider Monkey, worth an estimated $45.9 million in stock, and Phill Gross and Robert Atchinson’s Adage Capital Management was right behind this move, as the fund sold off about $21.3 million worth. These bearish behaviors are important to note, as total hedge fund interest fell by 2 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Citizens Financial Group Inc (NYSE:CFG). These stocks are Entergy Corporation (NYSE:ETR), RingCentral Inc (NYSE:RNG), Darden Restaurants, Inc. (NYSE:DRI), ON Semiconductor Corporation (NASDAQ:ON), Cheniere Energy Partners LP (NYSE:CQP), Ulta Beauty, Inc. (NASDAQ:ULTA), and Trip.com Group Limited (NASDAQ:TCOM). This group of stocks’ market values are similar to CFG’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ETR | 30 | 283209 | -1 |
| RNG | 48 | 2905250 | 1 |
| DRI | 25 | 337086 | -19 |
| ON | 41 | 1251738 | -3 |
| CQP | 3 | 10790 | 1 |
| ULTA | 42 | 935547 | 2 |
| TCOM | 36 | 1794035 | -5 |
| Average | 32.1 | 1073951 | -3.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.1 hedge funds with bullish positions and the average amount invested in these stocks was $1074 million. That figure was $362 million in CFG’s case. RingCentral Inc (NYSE:RNG) is the most popular stock in this table. On the other hand Cheniere Energy Partners LP (NYSE:CQP) is the least popular one with only 3 bullish hedge fund positions. Citizens Financial Group Inc (NYSE:CFG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CFG is 52.7. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on CFG as the stock returned 11.3% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Citizens Financial Group Inc (NYSE:CFG)
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Disclosure: None. This article was originally published at Insider Monkey.
