With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter of 2021. One of these stocks was The Bank of New York Mellon Corporation (NYSE:BK).
Is The Bank of New York Mellon Corporation (NYSE:BK) an excellent investment right now? The smart money was cutting their exposure. The number of bullish hedge fund bets shrunk by 6 lately. The Bank of New York Mellon Corporation (NYSE:BK) was in 46 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 58. Our calculations also showed that BK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Dmitry Balyasny of Balyasny Asset Management
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. Keeping this in mind let’s view the new hedge fund action regarding The Bank of New York Mellon Corporation (NYSE:BK).
Do Hedge Funds Think BK Is A Good Stock To Buy Now?
At third quarter’s end, a total of 46 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BK over the last 25 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
More specifically, Berkshire Hathaway was the largest shareholder of The Bank of New York Mellon Corporation (NYSE:BK), with a stake worth $3751 million reported as of the end of September. Trailing Berkshire Hathaway was Yacktman Asset Management, which amassed a stake valued at $197.6 million. D E Shaw, GAMCO Investors, and Arrowstreet 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 LFL Advisers allocated the biggest weight to The Bank of New York Mellon Corporation (NYSE:BK), around 9.3% of its 13F portfolio. Levin Capital Strategies is also relatively very bullish on the stock, designating 2.53 percent of its 13F equity portfolio to BK.
Seeing as The Bank of New York Mellon Corporation (NYSE:BK) has experienced bearish sentiment from hedge fund managers, we can see that there lies a certain “tier” of hedge funds who sold off their full holdings last quarter. Intriguingly, Brandon Haley’s Holocene Advisors dropped the largest investment of all the hedgies monitored by Insider Monkey, valued at close to $42.6 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund cut about $35.7 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 6 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to The Bank of New York Mellon Corporation (NYSE:BK). These stocks are T. Rowe Price Group, Inc. (NASDAQ:TROW), Kimberly Clark Corporation (NYSE:KMB), L3Harris Technologies, Inc. (NASDAQ:LHX), Veeva Systems Inc (NYSE:VEEV), Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA), Datadog, Inc. (NASDAQ:DDOG), and Amphenol Corporation (NYSE:APH). This group of stocks’ market values are similar to BK’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TROW | 35 | 471726 | 11 |
| KMB | 28 | 410445 | -9 |
| LHX | 29 | 492448 | -13 |
| VEEV | 44 | 1631737 | 0 |
| BBVA | 10 | 310429 | 1 |
| DDOG | 62 | 4934612 | 6 |
| APH | 26 | 897948 | -13 |
| Average | 33.4 | 1307049 | -2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.4 hedge funds with bullish positions and the average amount invested in these stocks was $1307 million. That figure was $4657 million in BK’s case. Datadog, Inc. (NASDAQ:DDOG) is the most popular stock in this table. On the other hand Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA) is the least popular one with only 10 bullish hedge fund positions. The Bank of New York Mellon Corporation (NYSE:BK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BK is 57.4. 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. 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 still beat the market by 5.6 percentage points. Hedge funds were also right about betting on BK, though not to the same extent, as the stock returned 6.3% since Q3 (through November 30th) and outperformed the market as well.
Follow Bank Of New York Mellon Corp (NYSE:BK)
Follow Bank Of New York Mellon Corp (NYSE:BK)
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Disclosure: None. This article was originally published at Insider Monkey.
