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Corteva, Inc. (CTVA): Are Hedge Funds Right About This Stock?

We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Corteva, Inc. (NYSE:CTVA) based on that data.

Corteva, Inc. (NYSE:CTVA) has experienced an increase in hedge fund sentiment in recent months. CTVA was in 36 hedge funds’ portfolios at the end of the first quarter of 2020. There were 27 hedge funds in our database with CTVA positions at the end of the previous quarter. Our calculations also showed that CTVA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a multitude of gauges shareholders have at their disposal to appraise publicly traded companies. A couple of the most underrated gauges are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the top hedge fund managers can outclass the market by a healthy amount (see the details here).

GOTHAM ASSET MANAGEMENT

Joel Greenblatt of Gotham Asset Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. 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 the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s view the key hedge fund action regarding Corteva, Inc. (NYSE:CTVA).

What does smart money think about Corteva, Inc. (NYSE:CTVA)?

At the end of the first quarter, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in CTVA over the last 18 quarters. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Ricky Sandler’s Eminence Capital has the most valuable position in Corteva, Inc. (NYSE:CTVA), worth close to $152.4 million, comprising 1.7% of its total 13F portfolio. The second most bullish fund manager is Sessa Capital, managed by John Petry, which holds a $149.2 million position; 18.3% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism consist of Brandon Haley’s Holocene Advisors, Larry Robbins’s Glenview Capital and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Sessa Capital allocated the biggest weight to Corteva, Inc. (NYSE:CTVA), around 18.27% of its 13F portfolio. Bronte Capital is also relatively very bullish on the stock, designating 3.35 percent of its 13F equity portfolio to CTVA.

As one would reasonably expect, key money managers have been driving this bullishness. Holocene Advisors, managed by Brandon Haley, established the most valuable position in Corteva, Inc. (NYSE:CTVA). Holocene Advisors had $60.2 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also made a $19.3 million investment in the stock during the quarter. The other funds with brand new CTVA positions are Israel Englander’s Millennium Management, Greg Eisner’s Engineers Gate Manager, and Jinghua Yan’s TwinBeech Capital.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Corteva, Inc. (NYSE:CTVA) but similarly valued. These stocks are Rockwell Automation Inc. (NYSE:ROK), Fortinet Inc (NASDAQ:FTNT), Nokia Corporation (NYSE:NOK), and Dollar Tree, Inc. (NASDAQ:DLTR). This group of stocks’ market values match CTVA’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ROK 37 335488 -2
FTNT 29 1465283 -13
NOK 23 178356 7
DLTR 42 1353619 -9
Average 32.75 833187 -4.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.75 hedge funds with bullish positions and the average amount invested in these stocks was $833 million. That figure was $510 million in CTVA’s case. Dollar Tree, Inc. (NASDAQ:DLTR) is the most popular stock in this table. On the other hand Nokia Corporation (NYSE:NOK) is the least popular one with only 23 bullish hedge fund positions. Corteva, Inc. (NYSE:CTVA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but 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 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. Unfortunately CTVA wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on CTVA were disappointed as the stock returned 16.9% 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 many of these stocks already outperformed the market so far this year.

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Disclosure: None. This article was originally published at Insider Monkey.