Do Hedge Funds Agree With Barclays PLC (ADR) (BCS)’s Top Financial Picks: Citigroup Inc (C), Manulife Financial Corporation (USA) (MFC) & MGIC Investment Corp. (MTG)

Barclays also believes that Manulife Financial Corporation (USA) (NYSE:MFC) has the greatest leverage in the strengthening global economy, although it is very sensitive to rising interest rates. In this way, Manulife is capable of going past the headwinds due to low interest rates at the moment and can gain more ground even before the interest rates start rising again. They pointed at double digit growth in Asia operations as the key asset for Manulife’s growth. Barclays has set a price target of $26 on Manulife Financial Corporation (USA) (NYSE:MFC), with ‘Overweight’ rating.

On the other hand, “hedgies” were not too positive on this stock as the stock saw an outflow of capital in the first three months of the year. There were 12 hedge funds holding $167.2 million worth of stock at the end of first trimester, versus 15 hedge funds with $228.9 million a quarter earlier. In addition, the stock lost 11% during the January – March period. Even Daniel Bubis‘ Tetrem Capital Management with largest position in Manulife Financial Corporation (USA) (NYSE:MFC), sold around 900,000 shares in the first three months, holding 7 million shares valued at $150.7 million at the end of March. Notably, Jim Simons‘ Renaissance Technologies closed its stake of 400,000 shares during the first quarter. Overall, hedge funds are not bullish on Manulife Financial, but Barclays believes that the company has a huge upside potential.

Barclays PLC (ADR) (NYSE:BCS) has also picked MGIC Investment Corp. (NYSE:MTG) as one of its top financial picks. MGIC Investment Corp. (NYSE:MTG)  is having a great 2015, so far, with the stock gaining 22.5%. Barclays has an ‘Overweight’ rating on the stock with a price target of $14 and it believes that the Street is underestimating the earnings growth of the company.

But how did hedge funds trade this stock? As of the end of March, there were 54 hedge funds holding long positions with a total investment of $1.78 billion, down from 57 hedge funds with $1.77 billion at the end of the previous quarter. Many funds hold convertible bonds underlying shares of the company, but the largest position is held by John Griffin’s Blue Ridge Capital, which disclosed 14.90 shares in its latest 13F. In addition, Stephen Mandel‘s Lone Pipe Capital initiated a stake with 12.40 million shares, while John Khoury’s Long Pond Capital disposed of 3.8 million shares and closed its stake during the first quarter.

Disclosure: None