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Hedge Funds Have Never Been This Bullish On Victory Capital Holdings, Inc. (VCTR)

“Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn’t by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today’s darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn’t attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal,” said Vilas Fund in its Q1 investor letter. We aren’t sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Victory Capital Holdings, Inc. (NASDAQ:VCTR).

Victory Capital Holdings, Inc. (NASDAQ:VCTR) was in 13 hedge funds’ portfolios at the end of March. VCTR shareholders have witnessed an increase in support from the world’s most elite money managers of late. There were 10 hedge funds in our database with VCTR holdings at the end of the previous quarter. Our calculations also showed that VCTR isn’t among the 30 most popular stocks among hedge funds.

To the average investor there are numerous indicators stock market investors have at their disposal to assess publicly traded companies. A pair of the less known indicators are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the best hedge fund managers can trounce the S&P 500 by a very impressive amount (see the details here).

RENAISSANCE TECHNOLOGIES

We’re going to take a look at the new hedge fund action surrounding Victory Capital Holdings, Inc. (NASDAQ:VCTR).

What have hedge funds been doing with Victory Capital Holdings, Inc. (NASDAQ:VCTR)?

At the end of the first quarter, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 30% from the previous quarter. By comparison, 9 hedge funds held shares or bullish call options in VCTR a year ago. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).

VCTR_june2019

Among these funds, Impax Asset Management held the most valuable stake in Victory Capital Holdings, Inc. (NASDAQ:VCTR), which was worth $23.2 million at the end of the first quarter. On the second spot was Azora Capital which amassed $19.2 million worth of shares. Moreover, Renaissance Technologies, BlueMar Capital Management, and Interval Partners were also bullish on Victory Capital Holdings, Inc. (NASDAQ:VCTR), allocating a large percentage of their portfolios to this stock.

Now, key money managers have jumped into Victory Capital Holdings, Inc. (NASDAQ:VCTR) headfirst. Qtron Investments, managed by Ronald Hua, established the most outsized position in Victory Capital Holdings, Inc. (NASDAQ:VCTR). Qtron Investments had $0.3 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $0.3 million position during the quarter. The only other fund with a brand new VCTR position is Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Victory Capital Holdings, Inc. (NASDAQ:VCTR) but similarly valued. We will take a look at Stewart Information Services Corp (NYSE:STC), Goosehead Insurance, Inc. (NASDAQ:GSHD), Harmony Gold Mining Company Limited (NYSE:HMY), and Central European Media Enterprises Ltd. (NASDAQ:CETV). This group of stocks’ market values resemble VCTR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
STC 17 139746 3
GSHD 4 8254 1
HMY 9 24948 2
CETV 7 5251 2
Average 9.25 44550 2

View table here if you experience formatting issues.

As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $62 million in VCTR’s case. Stewart Information Services Corp (NYSE:STC) is the most popular stock in this table. On the other hand Goosehead Insurance, Inc. (NASDAQ:GSHD) is the least popular one with only 4 bullish hedge fund positions. Victory Capital Holdings, Inc. (NASDAQ:VCTR) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Hedge funds were also right about betting on VCTR as the stock returned 13.8% during the same period and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.

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

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