Hedge Funds Are Selling Metlife Inc (MET)

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Metlife Inc (NYSE:MET) based on that data.

Metlife Inc (NYSE:MET) has seen a decrease in activity from the world’s largest hedge funds in recent months. Metlife Inc (NYSE:MET) was in 39 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 50. There were 41 hedge funds in our database with MET positions at the end of the second quarter. Our calculations also showed that MET isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a gander at the new hedge fund action encompassing Metlife Inc (NYSE:MET).

Richard Pzena - Pzena Investment Management

Richard S. Pzena of Pzena Investment Management

Do Hedge Funds Think MET Is A Good Stock To Buy Now?

At third quarter’s end, a total of 39 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from one quarter earlier. On the other hand, there were a total of 36 hedge funds with a bullish position in MET a year ago. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

More specifically, Pzena Investment Management was the largest shareholder of Metlife Inc (NYSE:MET), with a stake worth $328.2 million reported as of the end of September. Trailing Pzena Investment Management was Citadel Investment Group, which amassed a stake valued at $161.6 million. Millennium Management, D E Shaw, and Samlyn 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 Falcon Edge Capital allocated the biggest weight to Metlife Inc (NYSE:MET), around 2.25% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, designating 2.07 percent of its 13F equity portfolio to MET.

Because Metlife Inc (NYSE:MET) has witnessed bearish sentiment from the entirety of the hedge funds we track, we can see that there were a few funds who sold off their full holdings heading into Q4. It’s worth mentioning that Matthew Stadelman’s Diamond Hill Capital dropped the biggest stake of the 750 funds watched by Insider Monkey, comprising close to $255.9 million in stock, and Jinghua Yan’s TwinBeech Capital was right behind this move, as the fund cut about $8.9 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 2 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks similar to Metlife Inc (NYSE:MET). We will take a look at IDEXX Laboratories, Inc. (NASDAQ:IDXX), Align Technology, Inc. (NASDAQ:ALGN), Lululemon Athletica inc. (NASDAQ:LULU), Public Storage (NYSE:PSA), NXP Semiconductors NV (NASDAQ:NXPI), Ferrari N.V. (NYSE:RACE), and Itau Unibanco Holding SA (NYSE:ITUB). All of these stocks’ market caps are closest to MET’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IDXX 43 3698749 4
ALGN 49 2262912 -8
LULU 41 709432 -5
PSA 35 1260285 8
NXPI 51 1080819 -1
RACE 27 1177569 0
ITUB 16 379560 0
Average 37.4 1509904 -0.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 37.4 hedge funds with bullish positions and the average amount invested in these stocks was $1510 million. That figure was $1145 million in MET’s case. NXP Semiconductors NV (NASDAQ:NXPI) is the most popular stock in this table. On the other hand Itau Unibanco Holding SA (NYSE:ITUB) is the least popular one with only 16 bullish hedge fund positions. Metlife Inc (NYSE:MET) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MET is 59.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately MET wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MET were disappointed as the stock returned -4.3% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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