The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Invesco Ltd. (NYSE:IVZ) based on those filings.
Is Invesco Ltd. (NYSE:IVZ) the right pick for your portfolio? The smart money is getting more bullish. The number of bullish hedge fund bets rose by 2 recently. Our calculations also showed that IVZ 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 eyes of most traders, hedge funds are viewed as underperforming, old investment vehicles of yesteryear. While there are greater than 8000 funds trading today, Our experts look at the aristocrats of this group, around 850 funds. These investment experts command bulk of the hedge fund industry’s total asset base, and by following their highest performing stock picks, Insider Monkey has formulated a number of investment strategies that have historically outrun the market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. 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. Keeping this in mind we’re going to go over the fresh hedge fund action regarding Invesco Ltd. (NYSE:IVZ).
What have hedge funds been doing with Invesco Ltd. (NYSE:IVZ)?
Heading into the second quarter of 2020, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in IVZ over the last 18 quarters. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
Among these funds, Pzena Investment Management held the most valuable stake in Invesco Ltd. (NYSE:IVZ), which was worth $35.7 million at the end of the third quarter. On the second spot was Contrarius Investment Management which amassed $27.7 million worth of shares. Millennium Management, Marshall Wace LLP, and Arrowstreet 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 Contrarius Investment Management allocated the biggest weight to Invesco Ltd. (NYSE:IVZ), around 3.55% of its 13F portfolio. Neo Ivy Capital is also relatively very bullish on the stock, setting aside 0.38 percent of its 13F equity portfolio to IVZ.
Consequently, key hedge funds were breaking ground themselves. Contrarius Investment Management, managed by Stephen Mildenhall, assembled the largest position in Invesco Ltd. (NYSE:IVZ). Contrarius Investment Management had $27.7 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $2 million investment in the stock during the quarter. The other funds with new positions in the stock are Bruce Kovner’s Caxton Associates LP, Peter Muller’s PDT Partners, and Renee Yao’s Neo Ivy Capital.
Let’s check out hedge fund activity in other stocks similar to Invesco Ltd. (NYSE:IVZ). These stocks are ICU Medical, Inc. (NASDAQ:ICUI), United Therapeutics Corporation (NASDAQ:UTHR), Diamondback Energy Inc (NASDAQ:FANG), and Lincoln Electric Holdings, Inc. (NASDAQ:LECO). This group of stocks’ market values resemble IVZ’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.5 hedge funds with bullish positions and the average amount invested in these stocks was $517 million. That figure was $115 million in IVZ’s case. United Therapeutics Corporation (NASDAQ:UTHR) is the most popular stock in this table. On the other hand Lincoln Electric Holdings, Inc. (NASDAQ:LECO) is the least popular one with only 19 bullish hedge fund positions. Invesco Ltd. (NYSE:IVZ) is not the least popular stock in this group but hedge fund interest is still below average. 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 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 and surpassed the market by 13.2 percentage points. Unfortunately IVZ wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); IVZ investors were disappointed as the stock returned -10.4% during the second quarter 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 most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.