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. What do these smart investors think about Synovus Financial Corp. (NYSE:SNV)?
Is Synovus Financial Corp. (NYSE:SNV) a safe stock to buy now? The smart money is becoming less confident. The number of bullish hedge fund positions went down by 2 lately. Our calculations also showed that SNV 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). SNV was in 33 hedge funds’ portfolios at the end of March. There were 35 hedge funds in our database with SNV holdings at the end of the previous quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 87% since March 2017 and outperformed the S&P 500 ETFs by more than 51 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. 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. With all of this in mind let’s take a look at the recent hedge fund action surrounding Synovus Financial Corp. (NYSE:SNV).
How have hedgies been trading Synovus Financial Corp. (NYSE:SNV)?
At the end of the first quarter, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SNV over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Citadel Investment Group was the largest shareholder of Synovus Financial Corp. (NYSE:SNV), with a stake worth $61.6 million reported as of the end of September. Trailing Citadel Investment Group was Gillson Capital, which amassed a stake valued at $15.5 million. Renaissance Technologies, EJF Capital, and East Side Capital (RR Partners) 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 Forest Hill Capital allocated the biggest weight to Synovus Financial Corp. (NYSE:SNV), around 2.86% of its 13F portfolio. EJF Capital is also relatively very bullish on the stock, dishing out 2.85 percent of its 13F equity portfolio to SNV.
Judging by the fact that Synovus Financial Corp. (NYSE:SNV) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there is a sect of fund managers who sold off their full holdings last quarter. Intriguingly, Anand Parekh’s Alyeska Investment Group sold off the largest position of all the hedgies followed by Insider Monkey, worth close to $32.8 million in stock, and Paul Magidson, Jonathan Cohen. And Ostrom Enders’s Castine Capital Management was right behind this move, as the fund cut about $11.8 million worth. These transactions are interesting, as total hedge fund interest dropped by 2 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Synovus Financial Corp. (NYSE:SNV) but similarly valued. These stocks are Essent Group Ltd (NYSE:ESNT), TriNet Group Inc (NYSE:TNET), II-VI, Inc. (NASDAQ:IIVI), and Cushman & Wakefield plc (NYSE:CWK). This group of stocks’ market values are similar to SNV’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $154 million. That figure was $228 million in SNV’s case. Essent Group Ltd (NYSE:ESNT) is the most popular stock in this table. On the other hand Cushman & Wakefield plc (NYSE:CWK) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks Synovus Financial Corp. (NYSE:SNV) 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. Unfortunately SNV wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on SNV were disappointed as the stock returned 9.3% during the second quarter (through the end of May) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.