Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Vodafone Group Plc (NASDAQ:VOD) based on that data.
Vodafone Group Plc (NASDAQ:VOD) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 17 hedge funds’ portfolios at the end of March. Our calculations also showed that VOD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Aon plc (NYSE:AON), Koninklijke Philips NV (NYSE:PHG), and General Dynamics Corporation (NYSE:GD) to gather more data points.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Michael Gelband of ExodusPoint Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 let’s take a peek at the key hedge fund action surrounding Vodafone Group Plc (NASDAQ:VOD).
Do Hedge Funds Think VOD Is A Good Stock To Buy Now?
At the end of March, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in VOD over the last 23 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Vodafone Group Plc (NASDAQ:VOD), which was worth $595.5 million at the end of the fourth quarter. On the second spot was GoldenTree Asset Management which amassed $71.3 million worth of shares. Arrowstreet Capital, Levin Easterly Partners, and Citadel Investment Group 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 GoldenTree Asset Management allocated the biggest weight to Vodafone Group Plc (NASDAQ:VOD), around 3.23% of its 13F portfolio. Levin Easterly Partners is also relatively very bullish on the stock, setting aside 2.85 percent of its 13F equity portfolio to VOD.
Seeing as Vodafone Group Plc (NASDAQ:VOD) has experienced bearish sentiment from the aggregate hedge fund industry, we can see that there were a few fund managers that slashed their entire stakes last quarter. It’s worth mentioning that John Brennan’s Sirios Capital Management cut the biggest stake of the 750 funds tracked by Insider Monkey, totaling about $2 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund dumped about $1.4 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s check out hedge fund activity in other stocks similar to Vodafone Group Plc (NASDAQ:VOD). These stocks are Aon plc (NYSE:AON), Koninklijke Philips NV (NYSE:PHG), General Dynamics Corporation (NYSE:GD), Spotify Technology S.A. (NYSE:SPOT), KLA Corporation (NASDAQ:KLAC), Twitter Inc (NYSE:TWTR), and Regeneron Pharmaceuticals Inc (NASDAQ:REGN). This group of stocks’ market caps match VOD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AON | 72 | 7767726 | 9 |
| PHG | 11 | 104193 | 3 |
| GD | 31 | 5931757 | -9 |
| SPOT | 46 | 2991078 | -2 |
| KLAC | 40 | 1204040 | 4 |
| TWTR | 107 | 4534754 | 29 |
| REGN | 39 | 1308238 | -7 |
| Average | 49.4 | 3405969 | 3.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 49.4 hedge funds with bullish positions and the average amount invested in these stocks was $3406 million. That figure was $775 million in VOD’s case. Twitter Inc (NYSE:TWTR) is the most popular stock in this table. On the other hand Koninklijke Philips NV (NYSE:PHG) is the least popular one with only 11 bullish hedge fund positions. Vodafone Group Plc (NASDAQ:VOD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for VOD is 27. 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 negative signal and 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 28.5% in 2021 through July 23rd and surpassed the market again by 10.1 percentage points. Unfortunately VOD wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); VOD investors were disappointed as the stock returned -7.7% since the end of March (through 7/23) 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 in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
