Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Citigroup Inc (C), American International Group Inc (AIG), Bank of America Corp (BAC): Most Popular Financial Stocks Among Hedge Funds

The financial sector has always been an attractive segment for investors, since it has managed to provide steady returns over the years. Even though Financial stocks returned on average around 16% over the last three years, being outperformed by other sectors such as Healthcare with 27% and Technology with 20%, they are still attracting investors, probably by a lower level of risk, compared to other sectors. As the latest round of 13F filings showed, many financial stocks have seen a bulish sentiment from over 700 funds that we track at Insider Monkey. In this piece, we will examine top 10 financial stocks that have ranked as the most popular among hedge funds during the third quarter of 2014. Citigroup Inc (NYSE:C) and American International Group Inc (NYSE:AIG) have made the list as usual, being two of the leaders of the industry. However, the list contains some interesting points, which we will discuss below.

Hedge Fund Managers

Citigroup Inc (NYSE:C) could be found in the equity portfolios of 131 funds our of those that we track, which is up by one fund over the quarter. Overall, these investors hold around $11.17 billion worth of the company’s stock, up from $9.25 billion in the previous quarter. In this way, due to a high level of popularity, Citigroup Inc (NYSE:C) has also made the list of top 10 most popular stocks. The stock inched up by around 2.3% year-to-date, while during the third quarter alone it appreciated by almost 10%. One of the largest shareholders of Citigroup is Boykin Curry’s Eagle Capital Management, which owns 26.79 million shares as of the end of September, up by 268,900 shares over the quarter; the stake is worth $1.39 billion and is the fourth-largest in Eagle Investment’s equity portfolio. However, one of the most bullish investors is Andreas Halvorsen‘s Viking Global, which initiated a $772.33 million position in Citigroup Inc (NYSE:C) that contains 14.90 million shares. On the other hand, Doug Silverman’s Senator Investment Group liquidated its position, which contained 4.0 million shares previously.

American International Group Inc (NYSE:AIG) came in second, being included in the equity portfolios of 121 funds, the aggregate value of their positions amounting to $13.44 billion. However, American International Group Inc (NYSE:AIG) has witnessed a decline in the bullish sentiment, so to say, as the number of funds holding the stock declined by 5, and the aggregate value fell by $1.68 billion during the third quarter. Nevertheless, the company is still one of the favorite picks of Bruce Berkowitz of Fairholme Capital Management. Fairholme reduced its stake in American International Group Inc (NYSE:AIG) by around 9.50 million shares during the third quarter to 60.31 million shares, but the $3.26 billion position is still the largest holding in terms of value. Moreover, First Eagle Investment Management initiated a $186.64 million stake, which contains 3.46 million shares, while Dan Loeb‘s Third Point sold out its stake, which contained 6.0 million shares of American International Group Inc (NYSE:AIG) at the end of June.

Next in line is JPMorgan Chase & Co. (NYSE:JPM), in which 104 funds held long equity positions at the end of September, unchanged over the quarter. However, the aggregate value went up to $7.24 billion, from $5.90 billion in the previous quarter. Natixis Global Asset Management‘s Harris Associates owns around 31.42 million shares, up by 1.66 million shares over the quarter. Harris’ stake in JPMorgan Chase & Co. (NYSE:JPM) is valued at $1.89 billion, which represents around 3.1% of its total equity portfolio value. Lansdowne Partners, managed by Alex Snow, is another fund bullish on JPMorgan Chase & Co. (NYSE:JPM) and increased its position by 2.13 million shares to 22.65 million shares, valued at $1.36 billion.

Bank of America Corp (NYSE:BAC) has seen the number of funds that own the stock decline by 1 during the July-September period. A total of 101 funds reported holding the company in their last 13F filings, while the aggregate value of their positions increased by $774.15 million to $6.47 billion. Bank of America Corp (NYSE:BAC) represents the fourth-largest holding in Harris Associates’ equity portfolio, the investor holding 128.01 million shares, up by 3.93 million shares over the quarter, valued at $2.18 billion. In addition, Viking Global initiated a $165.73 million position with 9.72 million shares. On the other hand, Ken Griffin’s Citadel Advisors, sold amost its entire stake in Bank of America Corp (NYSE:BAC), reducing it to 37,600 shares, from 10.83 million shares.

Mastercard Inc (NYSE:MA) is the fifth-largest position in which 81 hedge funds reported long positions, versus 80 in the previous quarter. The aggregate value of these funds’ holdings went up to $7.10 billion, from $6.23 billion in the previous quarter. Chase Coleman and Feroz Dewan‘s Tiger Global Management has been one of the most bullish funds during the third quarter, raising its stake in Mastercard Inc (NYSE:MA) by 4.15 million shares to 7.59 million shares. On the other hand, Israel Englander’s Millennium Management sold around 1.37 million shares and currently holds approximately 46,700 shares.

Mastercard Inc (NYSE:MA) is followed closely by its peer from the consumer lending segment, Visa Inc (NYSE:V), in which 80 hedge funds out of those that we track reported stakes in the latest round of 13F filings. This number fell by 2 funds over the quarter, while the aggregate value of the stakes fell by $107.60 million to $5.10 billion. Harris Associates is one of the largest shareholders of Visa Inc (NYSE:V), owning 4.86 million shares, worth $1.04 billion; the fund raised its stake by 217,800 shares during the third quarter.

On the sixth spot is Wells Fargo & Co (NYSE:WFC), a company that has Warren Buffett‘s Berkshire Hathaway among its largest shareholders. Overall, 74 funds reported holding the stock in their equity portfolio, up by 3 over the quarter. However, the aggregate value of the positions held by these funds declined to $32.23 billion, from $31.46 billion in the previous quarter. Berkshire is the institutional investor with the largest stake, holding around 463.46 million shares, valued at $24.04 billion. Wells Fargo & Co (NYSE:WFC) is also the largest position in Berkshire’s equity portfolio, the stake amassing over 22% of the portfolio’s total value.

Ally Financial Inc (NYSE:ALLY) is on the next position. In this company, 58 funds reported holding long equity positions, versus 59 in the previous quarter. The total value of the stakes held by the funds fell slightly by $271.80 million to $5.08 billion. Ally Financial Inc (NYSE:ALLY) still represents the second-largest position in Third Point equity portfolio, the fund holding 41.92 million shares, down by 3.68 million shares over the quarter; the stake is valued at $969.91 million.

American Express Company (NYSE:AXP) and Voya Financial Inc (NYSE:VOYA) share the 9th and 10th positions, with 56 funds reporting long positions in each of these companies. American Express Company (NYSE:AXP) has seen the number of funds bullish on the stock go up by 11, while the aggregate value of the funds’ holdings declined by $992.18 million to $16.60 billion. One of the largest positions in American Express Company (NYSE:AXP) is held by Warren Buffett’s Berkshire, which disclosed a $13.27 billion position with 151.61 million shares.

In Voya Financial Inc (NYSE:VOYA), the number of funds with long positions went up from 44 in the previous quarter, while the aggregate value increased to $2.11 billion, from $1.65 billion. Jeff Smith‘s Starboard Value holds a significant position in Voya Financial, which is valued at $376.02 million and contains 9.62 million shares, up by 380,800 shares. Moreover, Voya Financial Inc (NYSE:VOYA) represents the second-largest position in Starboard’s equity portfolio. Larry Robbins‘ Glenview Capital Management initiated a stake in the company during the third quarter and reported ownership of 4.56 million shares, worth $178.21 million in its latest 13F filing.

Disclosure: none

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!