Is Federated Investors Inc (NYSE:FII) a good investment right now? We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, expert networks, and get tips from industry insiders. They fail miserably sometimes but historically their consensus stock picks outperformed the market after adjusting for known risk factors.
Federated Investors Inc (NYSE:FII) has experienced a decrease in support from the world’s most elite money managers in recent months. FII was in 12 hedge funds’ portfolios at the end of the third quarter of 2015. There were 18 hedge funds in our database with FII positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Integrated Device Technology, Inc. (NASDAQ:IDTI), SolarWinds Inc (NYSE:SWI), and Synaptics, Incorporated (NASDAQ:SYNA) to gather more data points.
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Now, we’re going to take a look at the key action regarding Federated Investors Inc (NYSE:FII).
Hedge fund activity in Federated Investors Inc (NYSE:FII)
Heading into Q4, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -33% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Chuck Royce’s Royce & Associates has the most valuable position in Federated Investors Inc (NYSE:FII), worth close to $164.8 million, accounting for 0.9% of its total 13F portfolio. The second most bullish fund manager is Markel Gayner Asset Management, led by Tom Gayner, holding an $58.1 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Remaining peers that are bullish contain Paul Marshall and Ian Wace’s Marshall Wace LLP, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC and Lee Munder’s Lee Munder Capital Group.
Judging by the fact that Federated Investors Inc (NYSE:FII) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there were a few funds that elected to cut their positions entirely in the third quarter. Intriguingly, David Dreman’s Dreman Value Management dumped the largest position of the “upper crust” of funds followed by Insider Monkey, comprising about $5.1 million in stock. Craig A. Drill’s fund, Craig Drill Capital, also dumped its stock, about $1.7 million worth. These moves are important to note, as total hedge fund interest was cut by 6 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Federated Investors Inc (NYSE:FII) but similarly valued. These stocks are Integrated Device Technology, Inc. (NASDAQ:IDTI), SolarWinds Inc (NYSE:SWI), Synaptics, Incorporated (NASDAQ:SYNA), and EnLink Midstream LLC (NYSE:ENLC). All of these stocks’ market caps are similar to FII’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IDTI | 36 | 520148 | -7 |
| SWI | 23 | 403604 | -4 |
| SYNA | 18 | 115596 | -4 |
| ENLC | 10 | 58533 | -1 |
As you can see these stocks had an average of 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $274 million. That figure was $273 million in FII’s case. Integrated Device Technology, Inc. (NASDAQ:IDTI) is the most popular stock in this table. On the other hand EnLink Midstream LLC (NYSE:ENLC) is the least popular one with only 10 bullish hedge fund positions. Federated Investors Inc (NYSE:FII) 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. In this regard IDTI might be a better candidate to consider a long position.
