After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Corteva, Inc. (NYSE:CTVA).
Is CTVA a good stock to buy now? Corteva, Inc. (NYSE:CTVA) has experienced a decrease in support from the world’s most elite money managers lately. Corteva, Inc. (NYSE:CTVA) was in 36 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 39. Our calculations also showed that CTVA isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind let’s check out the key hedge fund action encompassing Corteva, Inc. (NYSE:CTVA).
Do Hedge Funds Think CTVA Is A Good Stock To Buy Now?
At Q3’s end, a total of 36 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from one quarter earlier. On the other hand, there were a total of 37 hedge funds with a bullish position in CTVA a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Starboard Value LP was the largest shareholder of Corteva, Inc. (NYSE:CTVA), with a stake worth $337.4 million reported as of the end of September. Trailing Starboard Value LP was Eminence Capital, which amassed a stake valued at $204.2 million. Sessa Capital, Holocene Advisors, and Glenview Capital 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 Sessa Capital allocated the biggest weight to Corteva, Inc. (NYSE:CTVA), around 14.57% of its 13F portfolio. Starboard Value LP is also relatively very bullish on the stock, dishing out 10.01 percent of its 13F equity portfolio to CTVA.
Since Corteva, Inc. (NYSE:CTVA) has witnessed a decline in interest from the aggregate hedge fund industry, it’s safe to say that there were a few money managers who sold off their entire stakes last quarter. At the top of the heap, Greg Eisner’s Engineers Gate Manager dropped the biggest position of the “upper crust” of funds followed by Insider Monkey, valued at an estimated $6.5 million in stock. Jinghua Yan’s fund, TwinBeech Capital, also dumped its stock, about $3.8 million worth. These moves are interesting, as total hedge fund interest fell by 3 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Corteva, Inc. (NYSE:CTVA) but similarly valued. We will take a look at GSX Techedu Inc. (NYSE:GSX), Weyerhaeuser Co. (NYSE:WY), Old Dominion Freight Line, Inc. (NASDAQ:ODFL), TD Ameritrade Holding Corp. (NYSE:AMTD), AvalonBay Communities Inc (NYSE:AVB), Realty Income Corporation (NYSE:O), and EOG Resources Inc (NYSE:EOG). This group of stocks’ market valuations are closest to CTVA’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 33.1 hedge funds with bullish positions and the average amount invested in these stocks was $739 million. That figure was $1058 million in CTVA’s case. Old Dominion Freight Line, Inc. (NASDAQ:ODFL) is the most popular stock in this table. On the other hand GSX Techedu Inc. (NYSE:GSX) is the least popular one with only 18 bullish hedge fund positions. Corteva, Inc. (NYSE:CTVA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CTVA is 60.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on CTVA as the stock returned 37.3% since the end of Q3 (through 12/18) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.