Was The Smart Money Right About Fidelity National Information Services (FIS)?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended December 31st, so let’s proceed with the discussion of the hedge fund sentiment on Fidelity National Information Services Inc. (NYSE:FIS).

Fidelity National Information Services Inc. (NYSE:FIS) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 88 hedge funds’ portfolios at the end of the fourth quarter of 2020. Our calculations also showed that FIS isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). 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 Airbnb, Inc. (NASDAQ:ABNB), British American Tobacco plc (NYSE:BTI), and Vale SA (NYSE:VALE) to gather more data points.

William Von Mueffling of Cantillon Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now to identify the next stock with 10x upside potential. 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 website. Now let’s check out the recent hedge fund action encompassing Fidelity National Information Services Inc. (NYSE:FIS).

Do Hedge Funds Think FIS Is A Good Stock To Buy Now?

At Q4’s end, a total of 88 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the third quarter of 2020. By comparison, 105 hedge funds held shares or bullish call options in FIS a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Viking Global, managed by Andreas Halvorsen, holds the most valuable position in Fidelity National Information Services Inc. (NYSE:FIS). Viking Global has a $1.6742 billion position in the stock, comprising 4.6% of its 13F portfolio. The second most bullish fund manager is Select Equity Group, led by Robert Joseph Caruso, holding a $754.5 million position; the fund has 3.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism comprise William von Mueffling’s Cantillon Capital Management, Farallon Capital and Lone Pine Capital. In terms of the portfolio weights assigned to each position Park Presidio Capital allocated the biggest weight to Fidelity National Information Services Inc. (NYSE:FIS), around 8.9% of its 13F portfolio. Cadian Capital is also relatively very bullish on the stock, designating 8.57 percent of its 13F equity portfolio to FIS.

Because Fidelity National Information Services Inc. (NYSE:FIS) has witnessed falling interest from hedge fund managers, it’s easy to see that there was a specific group of money managers who sold off their entire stakes heading into Q1. Intriguingly, Panayotis Takis Sparaggis’s Alkeon Capital Management dropped the biggest position of the 750 funds followed by Insider Monkey, valued at close to $142.8 million in stock. Brandon Haley’s fund, Holocene Advisors, also cut its stock, about $69.2 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks similar to Fidelity National Information Services Inc. (NYSE:FIS). These stocks are Airbnb, Inc. (NASDAQ:ABNB), British American Tobacco plc (NYSE:BTI), Vale SA (NYSE:VALE), Deere & Company (NYSE:DE), Micron Technology, Inc. (NASDAQ:MU), Mondelez International Inc (NASDAQ:MDLZ), and Mercadolibre Inc (NASDAQ:MELI). This group of stocks’ market valuations are similar to FIS’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 56.6 hedge funds with bullish positions and the average amount invested in these stocks was $3814 million. That figure was $9181 million in FIS’s case. Micron Technology, Inc. (NASDAQ:MU) is the most popular stock in this table. On the other hand British American Tobacco plc (NYSE:BTI) is the least popular one with only 10 bullish hedge fund positions. Fidelity National Information Services Inc. (NYSE:FIS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FIS is 72.1. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and beat the market again by 0.9 percentage points. Unfortunately FIS wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on FIS were disappointed as the stock returned 7.9% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

Disclosure: None. This article was originally published at Insider Monkey.

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