With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the first quarter. One of these stocks was M&T Bank Corporation (NYSE:MTB).
M&T Bank Corporation (NYSE:MTB) was in 36 hedge funds’ portfolios at the end of March. MTB investors should pay attention to a decrease in hedge fund interest of late. There were 42 hedge funds in our database with MTB positions at the end of the previous quarter. Our calculations also showed that MTB isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to go over the fresh hedge fund action regarding M&T Bank Corporation (NYSE:MTB).
How are hedge funds trading M&T Bank Corporation (NYSE:MTB)?
Heading into the second quarter of 2019, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from the fourth quarter of 2018. The graph below displays the number of hedge funds with bullish position in MTB over the last 15 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.
More specifically, Berkshire Hathaway was the largest shareholder of M&T Bank Corporation (NYSE:MTB), with a stake worth $845.1 million reported as of the end of March. Trailing Berkshire Hathaway was D E Shaw, which amassed a stake valued at $75.3 million. Two Sigma Advisors, AQR Capital Management, and GLG Partners were also very fond of the stock, giving the stock large weights in their portfolios.
Because M&T Bank Corporation (NYSE:MTB) has faced a decline in interest from the aggregate hedge fund industry, we can see that there lies a certain “tier” of hedgies that slashed their positions entirely by the end of the third quarter. Interestingly, Ravi Chopra’s Azora Capital dumped the biggest investment of the “upper crust” of funds tracked by Insider Monkey, comprising close to $45.8 million in stock, and Clint Carlson’s Carlson Capital was right behind this move, as the fund cut about $41.6 million worth. These moves are interesting, as total hedge fund interest dropped by 6 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as M&T Bank Corporation (NYSE:MTB) but similarly valued. We will take a look at IHS Markit Ltd. (NASDAQ:INFO), Verisign, Inc. (NASDAQ:VRSN), Rogers Communications Inc. (NYSE:RCI), and Global Payments Inc (NYSE:GPN). This group of stocks’ market values are closest to MTB’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INFO | 30 | 1154869 | 3 |
| VRSN | 31 | 5137304 | 1 |
| RCI | 15 | 559786 | 2 |
| GPN | 29 | 557425 | 2 |
| Average | 26.25 | 1852346 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.25 hedge funds with bullish positions and the average amount invested in these stocks was $1852 million. That figure was $1237 million in MTB’s case. Verisign, Inc. (NASDAQ:VRSN) is the most popular stock in this table. On the other hand Rogers Communications Inc. (NYSE:RCI) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks M&T Bank Corporation (NYSE:MTB) 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 MTB as the stock returned 3.3% 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.
