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Hedge Funds Are Selling Banco Santander, S.A. (SAN)

During the first half of the fourth quarter the Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by about 4 percentage points as investors worried over the possible ramifications of rising interest rates. The hedge funds and institutional investors we track typically invest more in smaller-cap stocks than an average investor (i.e. only 298 S&P 500 constituents were among the 500 most popular stocks among hedge funds), and we have seen data that shows those funds paring back their overall exposure. Those funds cutting positions in small-caps is one reason why volatility has increased. In the following paragraphs, we take a closer look at what hedge funds and prominent investors think of Banco Santander, S.A. (NYSE:SAN) and see how the stock is affected by the recent hedge fund activity.

Is Banco Santander, S.A. (NYSE:SAN) worth your attention right now? The best stock pickers are becoming less hopeful. The number of long hedge fund positions dropped by 1 in recent months. Our calculations also showed that SAN isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are a multitude of metrics stock traders employ to assess their stock investments. A duo of the most underrated metrics are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the best investment managers can outperform the broader indices by a superb amount (see the details here).

Ken Fisher FISHER ASSET MANAGEMENT

Let’s analyze the fresh hedge fund action surrounding Banco Santander, S.A. (NYSE:SAN).

What does the smart money think about Banco Santander, S.A. (NYSE:SAN)?

At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the previous quarter. By comparison, 18 hedge funds held shares or bullish call options in SAN heading into this year. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

SAN_dec2018

The largest stake in Banco Santander, S.A. (NYSE:SAN) was held by Fisher Asset Management, which reported holding $474.7 million worth of stock at the end of September. It was followed by Renaissance Technologies with a $79 million position. Other investors bullish on the company included AQR Capital Management, Masters Capital Management, and Ariel Investments.

Since Banco Santander, S.A. (NYSE:SAN) has witnessed falling interest from the entirety of the hedge funds we track, it’s easy to see that there is a sect of money managers that elected to cut their positions entirely last quarter. It’s worth mentioning that Israel Englander’s Millennium Management dumped the largest position of the “upper crust” of funds monitored by Insider Monkey, valued at an estimated $1.1 million in stock, and Robert B. Gillam’s McKinley Capital Management was right behind this move, as the fund dumped about $0.9 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 1 funds last quarter.

Let’s check out hedge fund activity in other stocks similar to Banco Santander, S.A. (NYSE:SAN). We will take a look at ASML Holding N.V. (NASDAQ:ASML), CVS Health Corporation (NYSE:CVS), Baidu, Inc. (NASDAQ:BIDU), and NextEra Energy, Inc. (NYSE:NEE). All of these stocks’ market caps resemble SAN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ASML 13 525470 1
CVS 49 1926232 2
BIDU 53 4052257 -14
NEE 32 1164363 1
Average 36.75 1917081 -2.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 36.75 hedge funds with bullish positions and the average amount invested in these stocks was $1.92 billion. That figure was $754 million in SAN’s case. Baidu.com, Inc. (NASDAQ:BIDU) is the most popular stock in this table. On the other hand ASML Holding N.V. (NASDAQ:ASML) is the least popular one with only 13 bullish hedge fund positions. Banco Santander, S.A. (NYSE:SAN) 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. In this regard BIDU might be a better candidate to consider a long position.

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

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