We at Insider Monkey have gone over 738 13F filings that hedge funds and famous value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st. In this article we look at what those investors think of Visa Inc (NYSE:V).
According to most investors, hedge funds are perceived as worthless, outdated financial vehicles of yesteryear. While there are greater than 8000 funds trading at the moment, Our experts choose to focus on the elite of this group, approximately 750 funds. It is estimated that this group of investors direct most of all hedge funds’ total capital, and by tailing their best investments, Insider Monkey has unearthed a few investment strategies that have historically defeated Mr. Market. Insider Monkey’s flagship hedge fund strategy surpassed the S&P 500 index by around 5 percentage points per annum since its inception in May 2014 through the end of May. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 30.9% since February 2017 (through May 30th) even though the market was up nearly 24% during the same period. We just shared a list of 5 short targets in our latest quarterly update and they are already down an average of 11.9% in less than a couple of weeks whereas our long picks outperformed the market by 2 percentage points in this volatile 2 week period.
Let’s review the key hedge fund action regarding Visa Inc (NYSE:V).
What have hedge funds been doing with Visa Inc (NYSE:V)?
At the end of the first quarter, a total of 124 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from one quarter earlier. On the other hand, there were a total of 116 hedge funds with a bullish position in V a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Fisher Asset Management held the most valuable stake in Visa Inc (NYSE:V), which was worth $2457 million at the end of the first quarter. On the second spot was Berkshire Hathaway which amassed $1649.8 million worth of shares. Moreover, Akre Capital Management, Viking Global, and Arrowstreet Capital were also bullish on Visa Inc (NYSE:V), allocating a large percentage of their portfolios to this stock.
Because Visa Inc (NYSE:V) has faced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of fund managers who were dropping their entire stakes by the end of the third quarter. At the top of the heap, Steve Cohen’s Point72 Asset Management cut the largest investment of all the hedgies monitored by Insider Monkey, valued at close to $218 million in stock, and Daniel Sundheim’s D1 Capital Partners was right behind this move, as the fund sold off about $139.5 million worth. These moves are interesting, as total hedge fund interest fell by 4 funds by the end of the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Visa Inc (NYSE:V) but similarly valued. These stocks are Exxon Mobil Corporation (NYSE:XOM), JPMorgan Chase & Co. (NYSE:JPM), Walmart Inc. (NYSE:WMT), and Nestle SA (OTCMKTS:NSRGY). All of these stocks’ market caps match V’s market cap.
|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 52.5 hedge funds with bullish positions and the average amount invested in these stocks was $4417 million. That figure was $13224 million in V’s case. JPMorgan Chase & Co. (NYSE:JPM) is the most popular stock in this table. On the other hand Nestle SA (OTCMKTS:NSRGY) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Visa Inc (NYSE:V) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Hedge funds were also right about betting on V as the stock returned 4.4% during the same period and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.