Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Intuit Inc. (NASDAQ:INTU).
Hedge fund interest in Intuit Inc. (NASDAQ:INTU) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that INTU isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare INTU to other stocks including Lockheed Martin Corporation (NYSE:LMT), Square, Inc. (NYSE:SQ), and Uber Technologies, Inc. (NYSE:UBER) to get a better sense of its popularity.
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Noam Gottesman of GLG Partners
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Do Hedge Funds Think INTU Is A Good Stock To Buy Now?
At the end of March, a total of 68 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards INTU over the last 23 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 Intuit Inc. (NASDAQ:INTU) was held by Fundsmith LLP, which reported holding $1753.4 million worth of stock at the end of December. It was followed by Third Point with a $459.7 million position. Other investors bullish on the company included AQR Capital Management, Foxhaven Asset Management, and GLG Partners. In terms of the portfolio weights assigned to each position Blue Whale Capital allocated the biggest weight to Intuit Inc. (NASDAQ:INTU), around 6.34% of its 13F portfolio. Foxhaven Asset Management is also relatively very bullish on the stock, earmarking 6.3 percent of its 13F equity portfolio to INTU.
Judging by the fact that Intuit Inc. (NASDAQ:INTU) has experienced declining sentiment from the smart money, it’s safe to say that there were a few hedgies that elected to cut their full holdings last quarter. At the top of the heap, Barry Dargan’s Intermede Investment Partners sold off the biggest investment of the “upper crust” of funds tracked by Insider Monkey, comprising close to $106.6 million in stock. Frank Fu’s fund, CaaS Capital, also dropped its stock, about $10 million worth. These transactions are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Intuit Inc. (NASDAQ:INTU) but similarly valued. We will take a look at Lockheed Martin Corporation (NYSE:LMT), Square, Inc. (NYSE:SQ), Uber Technologies, Inc. (NYSE:UBER), Target Corporation (NYSE:TGT), Micron Technology, Inc. (NASDAQ:MU), CVS Health Corporation (NYSE:CVS), and ServiceNow Inc (NYSE:NOW). This group of stocks’ market values resemble INTU’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LMT | 50 | 2295448 | -3 |
| SQ | 92 | 9202246 | 3 |
| UBER | 130 | 10532866 | -5 |
| TGT | 60 | 4760942 | -18 |
| MU | 100 | 7621579 | 0 |
| CVS | 62 | 1315655 | 6 |
| NOW | 98 | 6127672 | 2 |
| Average | 84.6 | 5979487 | -2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 84.6 hedge funds with bullish positions and the average amount invested in these stocks was $5979 million. That figure was $4708 million in INTU’s case. Uber Technologies, Inc. (NYSE:UBER) is the most popular stock in this table. On the other hand Lockheed Martin Corporation (NYSE:LMT) is the least popular one with only 50 bullish hedge fund positions. Intuit Inc. (NASDAQ:INTU) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for INTU is 46.3. 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 25.8% in 2021 through August 6th and still beat the market by 6.7 percentage points. A small number of hedge funds were also right about betting on INTU as the stock returned 39.8% since the end of the first quarter (through 8/6) and outperformed the market by an even larger margin.
Follow Intuit Inc. (NASDAQ:INTU)
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Disclosure: None. This article was originally published at Insider Monkey.
