After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Credicorp Ltd. (NYSE:BAP).
Is Credicorp Ltd. (NYSE:BAP) going to take off soon? Prominent investors were becoming less confident. The number of bullish hedge fund bets decreased by 3 lately. Credicorp Ltd. (NYSE:BAP) was in 19 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 28. Our calculations also showed that BAP isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 22 hedge funds in our database with BAP holdings at the end of March.
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 has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 79 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
John Rogers of Ariel Investments
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, plant based food market is expected to explode 100-fold by 2050, so we are checking out this stock pitch. We go through lists like the 10 best growth stocks to buy 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now let’s go over the new hedge fund action encompassing Credicorp Ltd. (NYSE:BAP).
Do Hedge Funds Think BAP Is A Good Stock To Buy Now?
At the end of June, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from one quarter earlier. On the other hand, there were a total of 20 hedge funds with a bullish position in BAP a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Ariel Investments held the most valuable stake in Credicorp Ltd. (NYSE:BAP), which was worth $92.4 million at the end of the second quarter. On the second spot was Fisher Asset Management which amassed $69.1 million worth of shares. Renaissance Technologies, Hosking Partners, and AQR Capital Management 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 Ariel Investments allocated the biggest weight to Credicorp Ltd. (NYSE:BAP), around 0.87% of its 13F portfolio. Hosking Partners is also relatively very bullish on the stock, dishing out 0.35 percent of its 13F equity portfolio to BAP.
Judging by the fact that Credicorp Ltd. (NYSE:BAP) has witnessed a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few fund managers that slashed their full holdings last quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital dropped the largest position of the “upper crust” of funds followed by Insider Monkey, worth about $3.5 million in stock. Alec Litowitz and Ross Laser’s fund, Magnetar Capital, also sold off its stock, about $3.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 3 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to Credicorp Ltd. (NYSE:BAP). These stocks are The Middleby Corporation (NASDAQ:MIDD), First Solar, Inc. (NASDAQ:FSLR), Vertiv Holdings Co (NYSE:VRT), Reliance Steel & Aluminum Co. (NYSE:RS), NiSource Inc. (NYSE:NI), Western Alliance Bancorporation (NYSE:WAL), and Upstart Holdings, Inc. (NASDAQ:UPST). This group of stocks’ market valuations are similar to BAP’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MIDD | 35 | 821535 | 7 |
| FSLR | 31 | 317049 | 7 |
| VRT | 36 | 904262 | -3 |
| RS | 27 | 273896 | 9 |
| NI | 36 | 559849 | 8 |
| WAL | 28 | 188070 | 5 |
| UPST | 21 | 2135453 | 8 |
| Average | 30.6 | 742873 | 5.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.6 hedge funds with bullish positions and the average amount invested in these stocks was $743 million. That figure was $233 million in BAP’s case. Vertiv Holdings Co (NYSE:VRT) is the most popular stock in this table. On the other hand Upstart Holdings, Inc. (NASDAQ:UPST) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Credicorp Ltd. (NYSE:BAP) is even less popular than UPST. Our overall hedge fund sentiment score for BAP is 22.4. 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. Hedge funds clearly dropped the ball on BAP as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on BAP as the stock returned 7.7% since Q2 (through October 22nd) and outperformed the market by an even larger margin.
Follow Credicorp Ltd (NYSE:BAP)
Follow Credicorp Ltd (NYSE:BAP)
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Disclosure: None. This article was originally published at Insider Monkey.
