Hedge Funds Have Never Been More Bullish On Credicorp Ltd. (BAP)

At Insider Monkey, we pore over the filings of nearly 750 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Credicorp Ltd. (NYSE:BAP) makes for a good investment right now.

Credicorp Ltd. (NYSE:BAP) was in 22 hedge funds’ portfolios at the end of the third quarter of 2019. BAP shareholders have witnessed an increase in support from the world’s most elite money managers in recent months. There were 20 hedge funds in our database with BAP positions at the end of the previous quarter. Our calculations also showed that BAP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

In the financial world there are many methods market participants employ to evaluate their holdings. A pair of the most useful methods are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the top money managers can beat the market by a very impressive margin (see the details here).

Richard Driehaus of Driehaus Capital

Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s check out the new hedge fund action regarding Credicorp Ltd. (NYSE:BAP).

How are hedge funds trading Credicorp Ltd. (NYSE:BAP)?

Heading into the fourth quarter of 2019, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in BAP a year ago. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

Among these funds, Generation Investment Management held the most valuable stake in Credicorp Ltd. (NYSE:BAP), which was worth $283.3 million at the end of the third quarter. On the second spot was Fisher Asset Management which amassed $237.7 million worth of shares. AQR Capital Management, Driehaus Capital, and Millennium 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 Sloane Robinson Investment Management allocated the biggest weight to Credicorp Ltd. (NYSE:BAP), around 3.8% of its 13F portfolio. Generation Investment Management is also relatively very bullish on the stock, earmarking 2 percent of its 13F equity portfolio to BAP.

As one would reasonably expect, some big names have jumped into Credicorp Ltd. (NYSE:BAP) headfirst. Islet Management, managed by Joseph Samuels, created the biggest position in Credicorp Ltd. (NYSE:BAP). Islet Management had $9 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $4.5 million position during the quarter. The following funds were also among the new BAP investors: Minhua Zhang’s Weld Capital Management, Dmitry Balyasny’s Balyasny Asset Management, and Ken Griffin’s Citadel Investment Group.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Credicorp Ltd. (NYSE:BAP) but similarly valued. These stocks are Halliburton Company (NYSE:HAL), International Paper Company (NYSE:IP), Laboratory Corporation of America Holdings (NYSE:LH), and Nasdaq, Inc. (NASDAQ:NDAQ). This group of stocks’ market values are similar to BAP’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HAL 31 817394 -2
IP 27 273248 -4
LH 40 1435297 2
NDAQ 21 134209 1
Average 29.75 665037 -0.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 29.75 hedge funds with bullish positions and the average amount invested in these stocks was $665 million. That figure was $656 million in BAP’s case. Laboratory Corporation of America Holdings (NYSE:LH) is the most popular stock in this table. On the other hand Nasdaq, Inc. (NASDAQ:NDAQ) is the least popular one with only 21 bullish hedge fund positions. Credicorp Ltd. (NYSE:BAP) is not the least popular stock in this group but hedge fund interest is still below average. 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately BAP wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); BAP investors were disappointed as the stock returned 1.3% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.

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