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Hedge Funds Keep Buying Corteva, Inc. (CTVA)

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Corteva, Inc. (NYSE:CTVA) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.

Corteva, Inc. (NYSE:CTVA) has seen an increase in hedge fund interest in recent months. Corteva, Inc. (NYSE:CTVA) was in 39 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 37. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 36 hedge funds in our database with CTVA positions at the end of the first quarter. Our calculations also showed that CTVA isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the eyes of most stock holders, hedge funds are perceived as slow, outdated investment vehicles of yesteryear. While there are over 8000 funds with their doors open today, Our experts look at the moguls of this club, approximately 850 funds. These money managers direct bulk of the hedge fund industry’s total capital, and by keeping an eye on their highest performing picks, Insider Monkey has identified several investment strategies that have historically outrun the broader indices. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Ricky Sandler of Eminence Capital

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this junior gold mining stock. Legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to go over the key hedge fund action surrounding Corteva, Inc. (NYSE:CTVA).

Hedge fund activity in Corteva, Inc. (NYSE:CTVA)

At the end of the second quarter, a total of 39 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 8% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CTVA over the last 20 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

Is CTVA A Good Stock To Buy?

Of the funds tracked by Insider Monkey, Ricky Sandler’s Eminence Capital has the most valuable position in Corteva, Inc. (NYSE:CTVA), worth close to $172.8 million, accounting for 1.7% of its total 13F portfolio. Coming in second is Sessa Capital, led by John Petry, holding a $170.1 million position; 17.1% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that hold long positions consist of Brandon Haley’s Holocene Advisors, Larry Robbins’s Glenview Capital and Renaissance Technologies. In terms of the portfolio weights assigned to each position Sessa Capital allocated the biggest weight to Corteva, Inc. (NYSE:CTVA), around 17.09% of its 13F portfolio. Bronte Capital is also relatively very bullish on the stock, dishing out 3.85 percent of its 13F equity portfolio to CTVA.

Now, specific money managers were breaking ground themselves. Renaissance Technologies, assembled the largest position in Corteva, Inc. (NYSE:CTVA). Renaissance Technologies had $55.7 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also initiated a $3.3 million position during the quarter. The other funds with brand new CTVA positions are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Lee Ainslie’s Maverick Capital, and Andrew Weiss’s Weiss Asset Management.

Let’s also examine hedge fund activity in other stocks similar to Corteva, Inc. (NYSE:CTVA). We will take a look at Old Dominion Freight Line (NASDAQ:ODFL), ZoomInfo Technologies Inc. (NASDAQ:ZI), PPL Corporation (NYSE:PPL), Edison International (NYSE:EIX), Wheaton Precious Metals Corp. (NYSE:WPM), Corning Incorporated (NYSE:GLW), and TD Ameritrade Holding Corp. (NYSE:AMTD). This group of stocks’ market values are similar to CTVA’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ODFL 35 480042 2
ZI 24 157040 24
PPL 25 159807 -3
EIX 37 1670961 8
WPM 21 767509 -4
GLW 28 147576 -2
AMTD 47 1172699 1
Average 31 650805 3.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $651 million. That figure was $775 million in CTVA’s case. TD Ameritrade Holding Corp. (NYSE:AMTD) is the most popular stock in this table. On the other hand Wheaton Precious Metals Corp. (NYSE:WPM) is the least popular one with only 21 bullish hedge fund positions. Corteva, Inc. (NYSE:CTVA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CTVA is 72.6. 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 positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 33% in 2020 through the end of August and beat the market by 23.2 percentage points. Unfortunately CTVA wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on CTVA were disappointed as the stock returned 7.1% during the same time period 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 many of these stocks already outperformed the market so far this year.

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