The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article we look at what those investors think of Regions Financial Corporation (NYSE:RF).
Is Regions Financial Corporation (NYSE:RF) undervalued? The smart money was reducing their bets on the stock. The number of bullish hedge fund bets dropped by 5 lately. Regions Financial Corporation (NYSE:RF) was in 28 hedge funds’ portfolios at the end of September. The all time high for this statistic is 47. Our calculations also showed that RF isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a look at the latest hedge fund action surrounding Regions Financial Corporation (NYSE:RF).
David Siegel of Two Sigma Advisors
Do Hedge Funds Think RF Is A Good Stock To Buy Now?
At Q3’s end, a total of 28 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -15% from the previous quarter. The graph below displays the number of hedge funds with bullish position in RF over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Pzena Investment Management was the largest shareholder of Regions Financial Corporation (NYSE:RF), with a stake worth $80.2 million reported as of the end of September. Trailing Pzena Investment Management was Millennium Management, which amassed a stake valued at $28.4 million. Gillson Capital, Two Sigma Advisors, and Forest Hill Capital 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 Forest Hill Capital allocated the biggest weight to Regions Financial Corporation (NYSE:RF), around 3.06% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, dishing out 1.87 percent of its 13F equity portfolio to RF.
Since Regions Financial Corporation (NYSE:RF) has experienced falling interest from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of hedge funds that elected to cut their positions entirely heading into Q4. At the top of the heap, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors dropped the largest position of all the hedgies followed by Insider Monkey, worth about $9.1 million in stock. Greg Eisner’s fund, Engineers Gate Manager, also said goodbye to its stock, about $5.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 5 funds heading into Q4.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Regions Financial Corporation (NYSE:RF) but similarly valued. These stocks are The Clorox Company (NYSE:CLX), Cenovus Energy Inc (NYSE:CVE), Church & Dwight Co., Inc. (NYSE:CHD), Expeditors International of Washington, Inc. (NASDAQ:EXPD), Teladoc Health, Inc (NYSE:TDOC), Enphase Energy Inc (NASDAQ:ENPH), and Dynatrace, Inc. (NYSE:DT). This group of stocks’ market caps match RF’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CLX | 34 | 971875 | -3 |
| CVE | 30 | 717847 | -2 |
| CHD | 20 | 1362889 | -15 |
| EXPD | 26 | 452843 | -3 |
| TDOC | 40 | 2836350 | -3 |
| ENPH | 52 | 637786 | 8 |
| DT | 41 | 2389054 | -9 |
| Average | 34.7 | 1338378 | -3.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.7 hedge funds with bullish positions and the average amount invested in these stocks was $1338 million. That figure was $205 million in RF’s case. Enphase Energy Inc (NASDAQ:ENPH) is the most popular stock in this table. On the other hand Church & Dwight Co., Inc. (NYSE:CHD) is the least popular one with only 20 bullish hedge fund positions. Regions Financial Corporation (NYSE:RF) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RF is 30.4. 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 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately RF wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); RF investors were disappointed as the stock returned 5.4% since the end of September (through 12/9) 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.
Follow Regions Financial Corp (NYSE:RF)
Follow Regions Financial Corp (NYSE:RF)
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Disclosure: None. This article was originally published at Insider Monkey.
