We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ equity portfolio positions as of December 31. In this article, we look at what those funds think of Citigroup Inc. (NYSE:C) based on that data.
Is Citigroup Inc. (NYSE:C) worth your attention right now? Money managers are taking a bearish view. The number of long hedge fund positions was cut by 15 during the fourth quarter and Citigroup was in 106 hedge funds’ portfolios at the end of December. There were 121 hedge funds in our database with Citigroup 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 HSBC Holdings plc (ADR) (NYSE:HSBC), Novo Nordisk A/S (ADR) (NYSE:NVO), and Oracle Corporation (NASDAQ:ORCL) to gather more data points.
In the financial world, there are plenty of formulas market participants can use to assess publicly traded companies. Two of the most useful formulas are hedge fund and insider trading interest. We have shown that, historically, those who follow the best picks of the top fund managers can beat their index-focused peers by a superb margin (see the details here).
Now, we’re going to take a glance at the new action surrounding Citigroup Inc. (NYSE:C).
How have hedgies been trading Citigroup Inc. (NYSE:C)?
At the end of the fourth quarter, a total of 106 of the hedge funds tracked by Insider Monkey were bullish on this stock, down by 12% from the end of the previous quarter. However, with hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes substantially or accumulated large positions.
Of the funds tracked by Insider Monkey, Boykin Curry’s Eagle Capital Management has the most valuable position in Citigroup Inc. (NYSE:C), worth close to $1.31 billion, accounting for 5.3% of its total 13F portfolio. The second largest stake is held by Jonathan Auerbach’s Hound Partners, which reported a $695.3 million stake held in ‘Call’ options, which represents around 16% of its 13F portfolio. Some other members of the smart money that are bullish, encompass Ken Fisher’s Fisher Asset Management, Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC and Richard S. Pzena’s Pzena Investment Management.
Because Citigroup Inc. (NYSE:C) has witnessed falling interest from the entirety of the hedge funds we track, we can see that there was a specific group of funds that slashed their holdings heading into 2016. For example, Bruce Berkowitz’s Fairholme (FAIRX) dropped the biggest position of the “upper crust” of funds watched by Insider Monkey, comprising close to $149.3 million in stock, and Rob Citrone’s Discovery Capital Management was right behind this move, as the fund dropped about $87.8 million worth of shares. Overall, the total hedge fund interest was cut by 15 funds during the fourth quarter.
Let’s also examine hedge fund activity in other stocks similar to Citigroup Inc. (NYSE:C). We will take a look at HSBC Holdings plc (ADR) (NYSE:HSBC), Novo Nordisk A/S (ADR) (NYSE:NVO), Oracle Corporation (NASDAQ:ORCL), and Merck & Co., Inc. (NYSE:MRK). This group of stocks’ market caps are similar to Citigroup’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 36 funds with bullish positions and the average amount invested in these stocks was close to $3.0 billion, which compares to $9.97 billion in Citigroup’s case. Merck & Co., Inc. (NYSE:MRK) is the most popular stock in this table. On the other hand, HSBC Holdings plc (ADR) (NYSE:HSBC) is the least popular one with only eight bullish hedge fund positions. Compared to these stocks Citigroup Inc. (NYSE:C) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.