Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards Fidelity National Financial Inc (NYSE:FNF) at the end of the third quarter and determine whether the smart money was really smart about this stock.
Fidelity National Financial Inc (NYSE:FNF) shareholders have witnessed a decrease in hedge fund interest in recent months. Fidelity National Financial Inc (NYSE:FNF) was in 32 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 47. There were 34 hedge funds in our database with FNF holdings at the end of June. Our calculations also showed that FNF isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Charles Clough of Clough Capital Partners
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. Keeping this in mind let’s analyze the latest hedge fund action encompassing Fidelity National Financial Inc (NYSE:FNF).
Do Hedge Funds Think FNF Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in FNF over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Brave Warrior Capital was the largest shareholder of Fidelity National Financial Inc (NYSE:FNF), with a stake worth $398.6 million reported as of the end of September. Trailing Brave Warrior Capital was Windacre Partnership, which amassed a stake valued at $313.1 million. MFN Partners, Millennium Management, and Parsifal 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 Brave Warrior Capital allocated the biggest weight to Fidelity National Financial Inc (NYSE:FNF), around 13.96% of its 13F portfolio. MFN Partners is also relatively very bullish on the stock, dishing out 8.11 percent of its 13F equity portfolio to FNF.
Since Fidelity National Financial Inc (NYSE:FNF) has faced bearish sentiment from the smart money, it’s safe to say that there exists a select few hedgies who sold off their positions entirely last quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management dumped the largest position of the “upper crust” of funds tracked by Insider Monkey, comprising close to $15.3 million in stock, and Qing Li’s Sciencast Management was right behind this move, as the fund sold off about $1.3 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 2 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Fidelity National Financial Inc (NYSE:FNF) but similarly valued. We will take a look at Lincoln National Corporation (NYSE:LNC), SoFi Technologies Inc. (NASDAQ:SOFI), Discovery Inc. (NASDAQ:DISCA), Whirlpool Corporation (NYSE:WHR), Santander Consumer USA Holdings Inc (NYSE:SC), Aluminum Corp. of China Limited (NYSE:ACH), and Kimco Realty Corp (NYSE:KIM). This group of stocks’ market valuations are similar to FNF’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LNC | 29 | 734657 | -1 |
| SOFI | 33 | 852850 | 33 |
| DISCA | 42 | 515818 | -2 |
| WHR | 29 | 1134128 | -3 |
| SC | 18 | 752098 | -8 |
| ACH | 7 | 20331 | 3 |
| KIM | 21 | 152556 | 1 |
| Average | 25.6 | 594634 | 3.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.6 hedge funds with bullish positions and the average amount invested in these stocks was $595 million. That figure was $1391 million in FNF’s case. Discovery Inc. (NASDAQ:DISCA) is the most popular stock in this table. On the other hand Aluminum Corp. of China Limited (NYSE:ACH) is the least popular one with only 7 bullish hedge fund positions. Fidelity National Financial Inc (NYSE:FNF) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FNF is 59.1. 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. 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 FNF as the stock returned 12% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Fidelity National Financial Inc (Old Filings) (NYSE:FNF)
Follow Fidelity National Financial Inc (Old Filings) (NYSE:FNF)
Suggested Articles:
- 15 Biggest Public Companies in the world
- Short Seller Jim Chanos’ Top 10 Stock Picks
- 10 Best Whiskey and Alcohol Stocks to Buy in 2021
Disclosure: None. This article was originally published at Insider Monkey.
