A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Deutsche Bank Aktiengesellschaft (NYSE:DB).
Is DB a good stock to buy now? Investors who are in the know were buying. The number of bullish hedge fund positions increased by 4 in recent months. Deutsche Bank Aktiengesellschaft (NYSE:DB) was in 15 hedge funds’ portfolios at the end of September. The all time high for this statistic is 24. Our calculations also showed that DB 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a 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. With all of this in mind let’s view the new hedge fund action regarding Deutsche Bank Aktiengesellschaft (NYSE:DB).
Do Hedge Funds Think DB Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 36% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards DB over the last 21 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, Hudson Executive Capital was the largest shareholder of Deutsche Bank Aktiengesellschaft (NYSE:DB), with a stake worth $546.7 million reported as of the end of September. Trailing Hudson Executive Capital was Cerberus Capital Management, which amassed a stake valued at $522.8 million. Masters Capital Management, Odey Asset Management Group, and Marshall Wace LLP 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 Hudson Executive Capital allocated the biggest weight to Deutsche Bank Aktiengesellschaft (NYSE:DB), around 55.85% of its 13F portfolio. Cerberus Capital Management is also relatively very bullish on the stock, dishing out 20.05 percent of its 13F equity portfolio to DB.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, initiated the biggest position in Deutsche Bank Aktiengesellschaft (NYSE:DB). Citadel Investment Group had $3.9 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also made a $0.5 million investment in the stock during the quarter. The other funds with new positions in the stock are Minhua Zhang’s Weld Capital Management, Kahn Brothers, and David Andre and Astro Teller’s Cerebellum Capital.
Let’s check out hedge fund activity in other stocks similar to Deutsche Bank Aktiengesellschaft (NYSE:DB). These stocks are ViacomCBS Inc. (NASDAQ:VIAC), Hologic, Inc. (NASDAQ:HOLX), Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK), Smith & Nephew plc (NYSE:SNN), Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), Kansas City Southern (NYSE:KSU), and CDW Corporation (NASDAQ:CDW). This group of stocks’ market caps are closest to DB’s market cap.
|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 36.6 hedge funds with bullish positions and the average amount invested in these stocks was $1291 million. That figure was $1118 million in DB’s case. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) is the most popular stock in this table. On the other hand Perusahaan Perseroan (Persero) PT Telekomunikasi Indonesia Tbk (NYSE:TLK) is the least popular one with only 8 bullish hedge fund positions. Deutsche Bank Aktiengesellschaft (NYSE:DB) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for DB is 34.4. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on DB as the stock returned 26.3% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.