In this article we will take a look at whether hedge funds think The Bank of New York Mellon Corporation (NYSE:BK) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is The Bank of New York Mellon Corporation (NYSE:BK) a buy, sell, or hold? The smart money was getting more bullish. The number of bullish hedge fund bets moved up by 3 in recent months. The Bank of New York Mellon Corporation (NYSE:BK) was in 52 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 58. Our calculations also showed that BK isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Donald Yacktman of Yacktman Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a peek at the new hedge fund action surrounding The Bank of New York Mellon Corporation (NYSE:BK).
Do Hedge Funds Think BK Is A Good Stock To Buy Now?
At second quarter’s end, a total of 52 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BK over the last 24 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in The Bank of New York Mellon Corporation (NYSE:BK) was held by Berkshire Hathaway, which reported holding $3706.9 million worth of stock at the end of June. It was followed by Yacktman Asset Management with a $196.4 million position. Other investors bullish on the company included GAMCO Investors, D E Shaw, and AQR Capital Management. In terms of the portfolio weights assigned to each position LFL Advisers allocated the biggest weight to The Bank of New York Mellon Corporation (NYSE:BK), around 9.37% of its 13F portfolio. Levin Capital Strategies is also relatively very bullish on the stock, dishing out 2.56 percent of its 13F equity portfolio to BK.
As industrywide interest jumped, key money managers have been driving this bullishness. Gillson Capital, managed by Daniel Johnson, established the biggest position in The Bank of New York Mellon Corporation (NYSE:BK). Gillson Capital had $26 million invested in the company at the end of the quarter. Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners also initiated a $17 million position during the quarter. The following funds were also among the new BK investors: Ravi Chopra’s Azora Capital, Sander Gerber’s Hudson Bay Capital Management, and Allon Hellmann’s Full18 Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as The Bank of New York Mellon Corporation (NYSE:BK) but similarly valued. These stocks are Schlumberger Limited. (NYSE:SLB), TE Connectivity Ltd. (NYSE:TEL), BCE Inc. (NYSE:BCE), Match Group, Inc. (NASDAQ:MTCH), Marriott International Inc (NASDAQ:MAR), L3Harris Technologies, Inc. (NYSE:LHX), and Ross Stores, Inc. (NASDAQ:ROST). This group of stocks’ market valuations match BK’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SLB | 41 | 1067022 | -9 |
| TEL | 39 | 2134995 | 0 |
| BCE | 14 | 113288 | 4 |
| MTCH | 63 | 3368893 | -5 |
| MAR | 49 | 2454304 | -9 |
| LHX | 42 | 1016540 | 1 |
| ROST | 51 | 1448653 | 3 |
| Average | 42.7 | 1657671 | -2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 42.7 hedge funds with bullish positions and the average amount invested in these stocks was $1658 million. That figure was $4907 million in BK’s case. Match Group, Inc. (NASDAQ:MTCH) is the most popular stock in this table. On the other hand BCE Inc. (NYSE:BCE) is the least popular one with only 14 bullish hedge fund positions. The Bank of New York Mellon Corporation (NYSE:BK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BK is 73.7. 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. 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 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on BK as the stock returned 4% since the end of Q2 (through 10/1) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Bank Of New York Mellon Corp (NYSE:BK)
Follow Bank Of New York Mellon Corp (NYSE:BK)
Suggested Articles:
- 10 Biggest Companies and Hedge Funds Bullish on Ethereum
- 25 Best Caribbean Islands To Visit in 2021
- 11 Best Casino and Gambling Stocks To Buy Now
Disclosure: None. This article was originally published at Insider Monkey.
