The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Hancock Whitney Corporation (NASDAQ:HWC).
Hancock Whitney Corporation (NASDAQ:HWC) investors should pay attention to an increase in hedge fund sentiment recently. Our calculations also showed that HWC isn’t among the 30 most popular stocks among hedge funds (click for Q1 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a look at the recent hedge fund action regarding Hancock Whitney Corporation (NASDAQ:HWC).
What does smart money think about Hancock Whitney Corporation (NASDAQ:HWC)?
Heading into the second quarter of 2020, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 25% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards HWC over the last 18 quarters. 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, Gillson Capital held the most valuable stake in Hancock Whitney Corporation (NASDAQ:HWC), which was worth $9.7 million at the end of the third quarter. On the second spot was Forest Hill Capital which amassed $7.1 million worth of shares. Millennium Management, Arrowstreet Capital, and D E Shaw 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 Forest Hill Capital allocated the biggest weight to Hancock Whitney Corporation (NASDAQ:HWC), around 3.81% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, dishing out 1.64 percent of its 13F equity portfolio to HWC.
Now, key money managers have been driving this bullishness. Renaissance Technologies, initiated the most outsized position in Hancock Whitney Corporation (NASDAQ:HWC). Renaissance Technologies had $1.9 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $1.1 million investment in the stock during the quarter. The other funds with new positions in the stock are John Overdeck and David Siegel’s Two Sigma Advisors, Dmitry Balyasny’s Balyasny Asset Management, and Greg Eisner’s Engineers Gate Manager.
Let’s also examine hedge fund activity in other stocks similar to Hancock Whitney Corporation (NASDAQ:HWC). These stocks are Atlantic Union Bankshares Corporation (NASDAQ:AUB), Cimarex Energy Co (NYSE:XEC), American Equity Investment Life Holding Company (NYSE:AEL), and Innospec Inc. (NASDAQ:IOSP). This group of stocks’ market valuations are similar to HWC’s market valuation.
|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 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $132 million. That figure was $40 million in HWC’s case. Cimarex Energy Co (NYSE:XEC) is the most popular stock in this table. On the other hand Atlantic Union Bankshares Corporation (NASDAQ:AUB) is the least popular one with only 10 bullish hedge fund positions. Hancock Whitney Corporation (NASDAQ:HWC) is not the most popular stock in this group but hedge fund interest is still above average. 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 12.2% in 2020 through June 17th but beat the market by 14.8 percentage points. Unfortunately HWC wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on HWC were disappointed as the stock returned 19.4% 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.
Disclosure: None. This article was originally published at Insider Monkey.