Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards M&T Bank Corporation (NYSE:MTB) changed recently.
M&T Bank Corporation (NYSE:MTB) was in 46 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 42. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. MTB investors should pay attention to an increase in hedge fund interest lately. There were 36 hedge funds in our database with MTB holdings at the end of March. Our calculations also showed that MTB isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Bernard Horn of Polaris Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, billionaire John Paulson is loading up on the miners, so we are checking out stock pitches like this mining 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. With all of this in mind we’re going to take a look at the recent hedge fund action regarding M&T Bank Corporation (NYSE:MTB).
Do Hedge Funds Think MTB Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 46 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 28% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MTB over the last 24 quarters. 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, Adage Capital Management was the largest shareholder of M&T Bank Corporation (NYSE:MTB), with a stake worth $91.2 million reported as of the end of June. Trailing Adage Capital Management was Citadel Investment Group, which amassed a stake valued at $88.6 million. Millennium Management, AQR Capital Management, and Polaris Capital Management 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 BlueMar Capital Management allocated the biggest weight to M&T Bank Corporation (NYSE:MTB), around 1.69% of its 13F portfolio. Polaris Capital Management is also relatively very bullish on the stock, dishing out 1.26 percent of its 13F equity portfolio to MTB.
As aggregate interest increased, some big names have jumped into M&T Bank Corporation (NYSE:MTB) headfirst. LMR Partners, managed by Ben Levine, Andrew Manuel and Stefan Renold, assembled the biggest position in M&T Bank Corporation (NYSE:MTB). LMR Partners had $19.3 million invested in the company at the end of the quarter. Marc Lisker, Glenn Fuhrman and John Phelan’s MSDC Management also made a $6.4 million investment in the stock during the quarter. The other funds with brand new MTB positions are Daniel Johnson’s Gillson Capital, Andrew Weiss’s Weiss Asset Management, and Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management.
Let’s go over hedge fund activity in other stocks similar to M&T Bank Corporation (NYSE:MTB). We will take a look at Charles River Laboratories International Inc. (NYSE:CRL), Warner Music Group Corp. (NASDAQ:WMG), Shinhan Financial Group Co., Ltd. (NYSE:SHG), Incyte Corporation (NASDAQ:INCY), Ally Financial Inc (NYSE:ALLY), SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), and Tyler Technologies, Inc. (NYSE:TYL). All of these stocks’ market caps are similar to MTB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CRL | 44 | 1217955 | 2 |
| WMG | 29 | 793609 | 2 |
| SHG | 5 | 31985 | -1 |
| INCY | 34 | 3644056 | 2 |
| ALLY | 54 | 2432402 | 3 |
| SSNC | 49 | 2568906 | -5 |
| TYL | 33 | 731035 | 5 |
| Average | 35.4 | 1631421 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.4 hedge funds with bullish positions and the average amount invested in these stocks was $1631 million. That figure was $539 million in MTB’s case. Ally Financial Inc (NYSE:ALLY) is the most popular stock in this table. On the other hand Shinhan Financial Group Co., Ltd. (NYSE:SHG) is the least popular one with only 5 bullish hedge fund positions. M&T Bank Corporation (NYSE:MTB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MTB is 81.8. 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 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 through November 5th and beat the market again by 3.1 percentage points. Unfortunately MTB wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MTB were disappointed as the stock returned 7.6% since the end of June (through 11/5) 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 many of these stocks already outperformed the market since 2019.
Follow M&T Bank Corp (NYSE:MTB)
Follow M&T Bank Corp (NYSE:MTB)
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Disclosure: None. This article was originally published at Insider Monkey.
