Hedge Funds Are Selling First Horizon National Corporation (FHN)

We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article, we look at what those funds think of First Horizon National Corporation (NYSE:FHN) based on that data.

First Horizon National Corporation (NYSE:FHN) shareholders have witnessed a decrease in enthusiasm from smart money in recent months. At the end of this article we will also compare FHN to other stocks, including AngloGold Ashanti Limited (ADR) (NYSE:AU), American Capital Ltd. (NASDAQ:ACAS), and RLJ Lodging Trust (NYSE:RLJ) to get a better sense of its popularity.

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In today’s marketplace there are a lot of formulas shareholders can use to grade publicly traded companies. A pair of the less utilized formulas are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the top fund managers can outperform their index-focused peers by a very impressive margin (see the details here).

Keeping this in mind, let’s take a look at the recent action surrounding First Horizon National Corporation (NYSE:FHN).

What have hedge funds been doing with First Horizon National Corporation (NYSE:FHN)?

Heading into Q4, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 11% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Joe Huber’s Huber Capital Management has the number one position in First Horizon National Corporation (NYSE:FHN), worth close to $60.4 million, comprising 2.1% of its total 13F portfolio. Sitting at the No. 2 spot is Lee Munder Capital Group, led by Lee Munder, holding a $22.5 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism contain Israel Englander’s Millennium Management, Dmitry Balyasny’s Balyasny Asset Management and D. E. Shaw’s D E Shaw.

Due to the fact that First Horizon National Corporation (NYSE:FHN) has experienced declining sentiment from hedge fund managers, we can see that there lies a certain “tier” of hedgies that elected to cut their positions entirely last quarter. Interestingly, David Dreman’s Dreman Value Management dumped the largest position of the 700 funds followed by Insider Monkey, valued at about $12.5 million in stock, and Neil Chriss’s Hutchin Hill Capital was right behind this move, as the fund dumped about $7.8 million worth of FHN shares. These moves are interesting, as total hedge fund interest fell by 2 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to First Horizon National Corporation (NYSE:FHN). We will take a look at AngloGold Ashanti Limited (ADR) (NYSE:AU), American Capital Ltd. (NASDAQ:ACAS), RLJ Lodging Trust (NYSE:RLJ), and Webster Financial Corporation (NYSE:WBS). All of these stocks’ market caps resemble FHN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AU 15 495127 -3
ACAS 36 1095174 -2
RLJ 9 116093 -3
WBS 25 453351 2

As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $540 million. That figure was just $166 million in FHN’s case. American Capital Ltd. (NASDAQ:ACAS) is the most popular stock in this table, whereas RLJ Lodging Trust (NYSE:RLJ) is the least popular one with only 9 bullish hedge fund positions. First Horizon National Corporation (NYSE:FHN) 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 ACAS might be a better candidate to consider a long position.