The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Fiserv, Inc. (NASDAQ:FISV).
Is Fiserv, Inc. (NASDAQ:FISV) a safe stock to buy now? The best stock pickers were in a pessimistic mood. The number of bullish hedge fund positions fell by 3 recently. Fiserv, Inc. (NASDAQ:FISV) was in 72 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 94. Our calculations also showed that FISV isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 75 hedge funds in our database with FISV positions at the end of the first quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, the demand for helium is soaring and there is a helium supply shortage, so we are checking out stock pitches like this emerging helium 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. Keeping this in mind let’s take a gander at the fresh hedge fund action regarding Fiserv, Inc. (NASDAQ:FISV).
Do Hedge Funds Think FISV Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 72 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from the previous quarter. By comparison, 85 hedge funds held shares or bullish call options in FISV 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.
More specifically, BlueSpruce Investments was the largest shareholder of Fiserv, Inc. (NASDAQ:FISV), with a stake worth $715.3 million reported as of the end of June. Trailing BlueSpruce Investments was Kensico Capital, which amassed a stake valued at $254.4 million. Arrowstreet Capital, Point State Capital, and Omega Advisors 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 BlueSpruce Investments allocated the biggest weight to Fiserv, Inc. (NASDAQ:FISV), around 13.04% of its 13F portfolio. Columbus Point is also relatively very bullish on the stock, earmarking 10.41 percent of its 13F equity portfolio to FISV.
Judging by the fact that Fiserv, Inc. (NASDAQ:FISV) has witnessed declining sentiment from the smart money, we can see that there was a specific group of hedge funds that slashed their entire stakes by the end of the second quarter. It’s worth mentioning that Robert Pitts’s Steadfast Capital Management dropped the biggest position of all the hedgies tracked by Insider Monkey, valued at an estimated $148.3 million in stock, and Mason Morfit’s ValueAct Capital was right behind this move, as the fund cut about $102.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds by the end of the second quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Fiserv, Inc. (NASDAQ:FISV) but similarly valued. We will take a look at Becton, Dickinson and Company (NYSE:BDX), Illinois Tool Works Inc. (NYSE:ITW), Capital One Financial Corp. (NYSE:COF), Illumina, Inc. (NASDAQ:ILMN), Equinor ASA (NYSE:EQNR), Colgate-Palmolive Company (NYSE:CL), and The Blackstone Group Inc. (NYSE:BX). This group of stocks’ market values are similar to FISV’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BDX | 52 | 3335441 | -13 |
| ITW | 45 | 657608 | 12 |
| COF | 64 | 4053972 | 5 |
| ILMN | 51 | 1973287 | -1 |
| EQNR | 11 | 88633 | 3 |
| CL | 58 | 2368869 | 10 |
| BX | 54 | 2080104 | 5 |
| Average | 47.9 | 2079702 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 47.9 hedge funds with bullish positions and the average amount invested in these stocks was $2080 million. That figure was $2655 million in FISV’s case. Capital One Financial Corp. (NYSE:COF) is the most popular stock in this table. On the other hand Equinor ASA (NYSE:EQNR) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Fiserv, Inc. (NASDAQ:FISV) is more popular among hedge funds. Our overall hedge fund sentiment score for FISV is 75. 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 26.3% in 2021 through October 29th and still beat the market by 2.3 percentage points. Unfortunately FISV wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on FISV were disappointed as the stock returned -7.9% since the end of the second quarter (through 10/29) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
