Hedge Funds Are Warming Up To Franco-Nevada Corporation (FNV)

Is Franco-Nevada Corporation (NYSE:FNV) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Franco-Nevada Corporation (NYSE:FNV) was in 26 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 31. FNV investors should pay attention to an increase in hedge fund interest of late. There were 23 hedge funds in our database with FNV holdings at the end of June. Our calculations also showed that FNV 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. Now we’re going to review the latest hedge fund action surrounding Franco-Nevada Corporation (NYSE:FNV).

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

Heading into the fourth quarter of 2021, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the second quarter of 2021. By comparison, 31 hedge funds held shares or bullish call options in FNV a year ago. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).

The largest stake in Franco-Nevada Corporation (NYSE:FNV) was held by Renaissance Technologies, which reported holding $587 million worth of stock at the end of September. It was followed by Horizon Asset Management with a $123.2 million position. Other investors bullish on the company included Citadel Investment Group, Citadel Investment Group, and Sprott Asset Management. In terms of the portfolio weights assigned to each position Beddow Capital Management allocated the biggest weight to Franco-Nevada Corporation (NYSE:FNV), around 3.92% of its 13F portfolio. Forest Hill Capital is also relatively very bullish on the stock, setting aside 2.95 percent of its 13F equity portfolio to FNV.

With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, assembled the biggest position in Franco-Nevada Corporation (NYSE:FNV). Balyasny Asset Management had $34 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $5.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Michael Gelband’s ExodusPoint Capital, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital).

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Franco-Nevada Corporation (NYSE:FNV) but similarly valued. We will take a look at AmerisourceBergen Corporation (NYSE:ABC), Cheniere Energy, Inc. (NYSE:LNG), Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), Expedia Group Inc (NASDAQ:EXPE), Sirius XM Holdings Inc (NASDAQ:SIRI), Kansas City Southern (NYSE:KSU), and Upstart Holdings, Inc. (NASDAQ:UPST). This group of stocks’ market valuations are closest to FNV’s market valuation.

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As you can see these stocks had an average of 48.6 hedge funds with bullish positions and the average amount invested in these stocks was $3605 million. That figure was $951 million in FNV’s case. Expedia Group Inc (NASDAQ:EXPE) is the most popular stock in this table. On the other hand Upstart Holdings, Inc. (NASDAQ:UPST) is the least popular one with only 23 bullish hedge fund positions. Franco-Nevada Corporation (NYSE:FNV) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FNV is 35.9. 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 negative signal and 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 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately FNV wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); FNV investors were disappointed as the stock returned 1.2% since the end of September (through 12/9) 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 most of these stocks already outperformed the market in 2021.

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