The elite funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Itau Unibanco Holding SA (ADR) (NYSE:ITUB) from the perspective of those elite funds.
Itau Unibanco Holding SA (ADR) (NYSE:ITUB) has experienced an increase in activity from the world’s largest hedge funds in recent months, with 2 more hedgies owning the stock. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as BlackRock, Inc. (NYSE:BLK), The Dow Chemical Company (NYSE:DOW), and HDFC Bank Limited (ADR) (NYSE:HDB) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
What have hedge funds been doing with Itau Unibanco Holding SA (ADR) (NYSE:ITUB)?
Heading into the fourth quarter of 2016, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a gain of 9% from the second quarter of 2016 and a gain of 60% from the first quarter of 2016. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, William B. Gray’s Orbis Investment Management has the biggest position in Itau Unibanco Holding SA (ADR) (NYSE:ITUB), worth close to $178.1 million, accounting for 1.2% of its total 13F portfolio. Sitting at the No. 2 spot is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $147.7 million position. Some other members of the smart money that hold long positions include Cliff Asness’ AQR Capital Management, David Stemerman’s Conatus Capital Management and Howard Marks’ Oaktree Capital Management.