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Hedge Funds Are Warming Up To Citizens Financial Group Inc (CFG)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Citizens Financial Group Inc (NYSE:CFG).

Citizens Financial Group Inc (NYSE:CFG) was in 46 hedge funds’ portfolios at the end of the first quarter of 2020. CFG investors should be aware of an increase in enthusiasm from smart money recently. There were 42 hedge funds in our database with CFG holdings at the end of the previous quarter. Our calculations also showed that CFG isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 44 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Phill Gross of Adage Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this successful trader’s “corona catalyst plays“. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s take a gander at the recent hedge fund action surrounding Citizens Financial Group Inc (NYSE:CFG).

Hedge fund activity in Citizens Financial Group Inc (NYSE:CFG)

At Q1’s end, a total of 46 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the previous quarter. On the other hand, there were a total of 41 hedge funds with a bullish position in CFG a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Ken Griffin’s Citadel Investment Group has the biggest position in Citizens Financial Group Inc (NYSE:CFG), worth close to $131.4 million, accounting for 0.1% of its total 13F portfolio. Sitting at the No. 2 spot is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $111.1 million position; 0.3% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors with similar optimism include Cliff Asness’s AQR Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Ricky Sandler’s Eminence Capital. In terms of the portfolio weights assigned to each position Castine Capital Management allocated the biggest weight to Citizens Financial Group Inc (NYSE:CFG), around 7.2% of its 13F portfolio. MSDC Management is also relatively very bullish on the stock, designating 3.59 percent of its 13F equity portfolio to CFG.

Consequently, key hedge funds were leading the bulls’ herd. MSDC Management, managed by Marc Lisker, Glenn Fuhrman and John Phelan, assembled the most valuable position in Citizens Financial Group Inc (NYSE:CFG). MSDC Management had $13.3 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $3.6 million investment in the stock during the quarter. The following funds were also among the new CFG investors: Greg Eisner’s Engineers Gate Manager, Michael Gelband’s ExodusPoint Capital, and Phil Stone’s Fourthstone LLC.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Citizens Financial Group Inc (NYSE:CFG) but similarly valued. We will take a look at Shaw Communications Inc (NYSE:SJR), Neurocrine Biosciences, Inc. (NASDAQ:NBIX), Trimble Inc. (NASDAQ:TRMB), and ASE Technology Holding Co., Ltd. (NYSE:ASX). This group of stocks’ market valuations are closest to CFG’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SJR 12 152105 0
NBIX 38 1054891 -4
TRMB 20 891932 -10
ASX 9 145541 -1
Average 19.75 561117 -3.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $561 million. That figure was $828 million in CFG’s case. Neurocrine Biosciences, Inc. (NASDAQ:NBIX) is the most popular stock in this table. On the other hand ASE Technology Holding Co., Ltd. (NYSE:ASX) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Citizens Financial Group Inc (NYSE:CFG) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd but still managed to beat the market by 15.6 percentage points. Hedge funds were also right about betting on CFG, though not to the same extent, as the stock returned 15.1% in Q2 (through May 22nd) and outperformed the market as well.

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