We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the fourth quarter, which unveil their equity positions as of December 31. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards V.F. Corporation (NYSE:VFC).
Is V.F. Corporation (NYSE:VFC) a buy, sell, or hold? Money managers are in a pessimistic mood. The number of long hedge fund positions dropped by 7 lately. Our calculations also showed that VFC isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
Ray Dalio of Bridgewater Associates
We leave no stone unturned when looking for the next great investment idea. For example, COVID-19 pandemic is still the main driver of stock prices. So we are checking out this trader’s corona catalyst trades. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a look at the new hedge fund action regarding V.F. Corporation (NYSE:VFC).
How are hedge funds trading V.F. Corporation (NYSE:VFC)?
At Q4’s end, a total of 29 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -19% from one quarter earlier. On the other hand, there were a total of 27 hedge funds with a bullish position in VFC a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Citadel Investment Group held the most valuable stake in V.F. Corporation (NYSE:VFC), which was worth $183 million at the end of the third quarter. On the second spot was Two Sigma Advisors which amassed $142.3 million worth of shares. Samlyn Capital, Arrowstreet Capital, and AQR 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 Shellback Capital allocated the biggest weight to V.F. Corporation (NYSE:VFC), around 2.62% of its 13F portfolio. Ayrshire Capital Management is also relatively very bullish on the stock, setting aside 2.4 percent of its 13F equity portfolio to VFC.
Since V.F. Corporation (NYSE:VFC) has faced bearish sentiment from hedge fund managers, logic holds that there was a specific group of hedge funds that elected to cut their positions entirely by the end of the third quarter. Interestingly, Robert Pohly’s Samlyn Capital dropped the biggest position of the “upper crust” of funds followed by Insider Monkey, totaling close to $46.8 million in stock, and Renaissance Technologies was right behind this move, as the fund dropped about $45 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 7 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks similar to V.F. Corporation (NYSE:VFC). These stocks are Dollar General Corp. (NYSE:DG), Manulife Financial Corporation (NYSE:MFC), FedEx Corporation (NYSE:FDX), and The Kraft Heinz Company (NASDAQ:KHC). This group of stocks’ market valuations are similar to VFC’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DG | 50 | 2075641 | 1 |
| MFC | 19 | 284486 | 0 |
| FDX | 45 | 1481070 | 0 |
| KHC | 34 | 10747172 | -5 |
| Average | 37 | 3647092 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 37 hedge funds with bullish positions and the average amount invested in these stocks was $3647 million. That figure was $771 million in VFC’s case. Dollar General Corp. (NYSE:DG) is the most popular stock in this table. On the other hand Manulife Financial Corporation (NYSE:MFC) is the least popular one with only 19 bullish hedge fund positions. V.F. Corporation (NYSE:VFC) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 1.0% in 2020 through May 1st but beat the market by 12.9 percentage points. Unfortunately VFC wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); VFC investors were disappointed as the stock returned -44% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
