Hedge Funds Are Selling Grupo Supervielle S.A. (SUPV)

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Grupo Supervielle S.A. (NYSE:SUPV).

Is Grupo Supervielle S.A. (NYSE:SUPV) ready to rally soon? The smart money is reducing their bets on the stock. The number of long hedge fund bets shrunk by 2 recently. Our calculations also showed that SUPV isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Crispin Odey of Odey Asset Management Group

We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Now we’re going to review the new hedge fund action regarding Grupo Supervielle S.A. (NYSE:SUPV).

How are hedge funds trading Grupo Supervielle S.A. (NYSE:SUPV)?

At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of -29% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in SUPV over the last 17 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Kora Management held the most valuable stake in Grupo Supervielle S.A. (NYSE:SUPV), which was worth $7.7 million at the end of the third quarter. On the second spot was Odey Asset Management Group which amassed $1.9 million worth of shares. Highland Capital Management, LMR Partners, and Citadel Investment Group 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 Kora Management allocated the biggest weight to Grupo Supervielle S.A. (NYSE:SUPV), around 2.04% of its 13F portfolio. Odey Asset Management Group is also relatively very bullish on the stock, setting aside 0.21 percent of its 13F equity portfolio to SUPV.

Judging by the fact that Grupo Supervielle S.A. (NYSE:SUPV) has faced falling interest from the aggregate hedge fund industry, logic holds that there exists a select few fund managers who sold off their positions entirely last quarter. Intriguingly, Israel Englander’s Millennium Management dropped the biggest stake of the 750 funds tracked by Insider Monkey, comprising an estimated $2.2 million in stock, and Minhua Zhang’s Weld Capital Management was right behind this move, as the fund dumped about $0.7 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 2 funds last quarter.

Let’s check out hedge fund activity in other stocks similar to Grupo Supervielle S.A. (NYSE:SUPV). We will take a look at South Plains Financial, Inc. (NASDAQ:SPFI), Nesco Holdings, Inc. (NYSE:NSCO), DRDGOLD Limited (NYSE:DRD), and Rimini Street, Inc. (NASDAQ:RMNI). This group of stocks’ market valuations resemble SUPV’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SPFI 7 10846 -1
NSCO 11 22374 -7
DRD 4 6630 1
RMNI 4 12681 -2
Average 6.5 13133 -2.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 6.5 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. That figure was $12 million in SUPV’s case. Nesco Holdings, Inc. (NYSE:NSCO) is the most popular stock in this table. On the other hand DRDGOLD Limited (NYSE:DRD) is the least popular one with only 4 bullish hedge fund positions. Grupo Supervielle S.A. (NYSE:SUPV) 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately SUPV wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); SUPV investors were disappointed as the stock returned -12.8% during the first two months of the fourth 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 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.

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