Hedge funds are not perfect. They have their bad picks just like everyone else. Valeant, a stock hedge funds have loved, lost 79% during the last 12 months ending in November 21. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 30 mid-cap stocks among the best performing hedge funds yielded an average return of 18% in the same time period, vs. a gain of 7.6% for the S&P 500 Index. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the successful funds think of ING Groep N.V. (ADR) (NYSE:ING).
ING Groep N.V. (ADR) (NYSE:ING) was included in the 13F portfolios of 12 funds from our database at the end of September. The company witnessed a decrease in hedge fund sentiment lately, as there had been 14 hedge funds in our database with ING positions at the end of the previous quarter. At the end of this article we will also compare ING to other stocks including General Dynamics Corporation (NYSE:GD), Dominion Resources, Inc. (NYSE:D), and FedEx Corporation (NYSE:FDX) to get a better sense of its popularity.
Follow I N G Groep N V (NYSE:ING)
Follow I N G Groep N V (NYSE:ING)
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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With all of this in mind, we’re going to take a gander at the key action surrounding ING Groep N.V. (ADR) (NYSE:ING).
Hedge fund activity in ING Groep N.V. (ADR) (NYSE:ING)
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, which represents a decline of 14% from the second quarter of 2016. On the other hand, there were a total of six hedge funds with a bullish position in ING at the beginning of this year. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holds the most valuable position in ING Groep N.V. (ADR) (NYSE:ING). Arrowstreet Capital has a $11.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Arrowstreet Capital’s heels is Renaissance Technologies, one of the largest hedge funds in the world,holding a $11.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism contain William B. Gray’s Orbis Investment Management, Ken Fisher’s Fisher Asset Management, and John Overdeck and David Siegel’s Two Sigma Advisors. We should note that Orbis Investment Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
Because ING Groep N.V. (ADR) (NYSE:ING) has encountered bearish sentiment from hedge fund managers, logic holds that there were a few hedge funds who were dropping their entire stakes in the third quarter. Intriguingly, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital sold off the largest position of all the investors monitored by Insider Monkey, comprising close to $19.9 million in stock. Peter Muller’s fund, PDT Partners, also dumped its stock, about $1.6 million worth.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as ING Groep N.V. (ADR) (NYSE:ING) but similarly valued. These stocks are General Dynamics Corporation (NYSE:GD), Dominion Resources, Inc. (NYSE:D), FedEx Corporation (NYSE:FDX), and Suncor Energy Inc. (USA) (NYSE:SU). This group of stocks’ market caps are similar to ING’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GD | 40 | 7209138 | -11 |
| D | 20 | 292616 | 2 |
| FDX | 49 | 4031572 | 3 |
| SU | 22 | 809820 | -3 |
As you can see these stocks had an average of 33 funds with bullish positions and the average amount invested in these stocks was $3.09 billion. That figure was just $59 million in ING’s case. FedEx Corporation (NYSE:FDX) is the most popular stock in this table. On the other hand Dominion Resources, Inc. (NYSE:D) is the least popular one with 20 bullish hedge fund positions. Compared to these stocks ING Groep N.V. (ADR) (NYSE:ING) is even less popular than Dominion Resources. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
Disclosure: none
