Is First Horizon National Corporation (FHN) Going to Burn These Hedge Funds?

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 30th, so let’s proceed with the discussion of the hedge fund sentiment on First Horizon National Corporation (NYSE:FHN).

First Horizon National Corporation (NYSE:FHN) investors should be aware of a decrease in enthusiasm from smart money in recent months. First Horizon National Corporation (NYSE:FHN) was in 24 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 35. Our calculations also showed that FHN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Joe Huber - Huber Capital Management

Joe Huber of Huber Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to take a look at the fresh hedge fund action regarding First Horizon National Corporation (NYSE:FHN).

Do Hedge Funds Think FHN Is A Good Stock To Buy Now?

At Q3’s end, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from one quarter earlier. By comparison, 30 hedge funds held shares or bullish call options in FHN a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is FHN A Good Stock To Buy?

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Cliff Asness’s AQR Capital Management has the number one position in First Horizon National Corporation (NYSE:FHN), worth close to $14.8 million, comprising less than 0.1%% of its total 13F portfolio. On AQR Capital Management’s heels is Joe Huber of Huber Capital Management, with a $14 million position; the fund has 3.6% of its 13F portfolio invested in the stock. Remaining peers that are bullish comprise Mark Lee’s Forest Hill Capital, John D. Gillespie’s Prospector Partners and Paul Tudor Jones’s Tudor Investment Corp. In terms of the portfolio weights assigned to each position Huber Capital Management allocated the biggest weight to First Horizon National Corporation (NYSE:FHN), around 3.61% of its 13F portfolio. Forest Hill Capital is also relatively very bullish on the stock, dishing out 3.32 percent of its 13F equity portfolio to FHN.

Seeing as First Horizon National Corporation (NYSE:FHN) has experienced bearish sentiment from hedge fund managers, it’s safe to say that there lies a certain “tier” of hedgies that elected to cut their positions entirely heading into Q4. Interestingly, Allon Hellmann’s Full18 Capital said goodbye to the largest position of the “upper crust” of funds tracked by Insider Monkey, comprising an estimated $4.1 million in stock, and Noam Gottesman’s GLG Partners was right behind this move, as the fund dumped about $3.8 million worth. These bearish behaviors are important to note, as total hedge fund interest dropped by 3 funds heading into Q4.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as First Horizon National Corporation (NYSE:FHN) but similarly valued. We will take a look at Juniper Networks, Inc. (NYSE:JNPR), Oatly Group AB (NASDAQ:OTLY), Dolby Laboratories, Inc. (NYSE:DLB), Genpact Limited (NYSE:G), UGI Corp (NYSE:UGI), Lamb Weston Holdings, Inc. (NYSE:LW), and Anaplan, Inc. (NYSE:PLAN). This group of stocks’ market valuations resemble FHN’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
JNPR 26 288397 -1
OTLY 13 136864 -6
DLB 33 521159 2
G 24 299354 2
UGI 20 128595 -3
LW 31 426705 -5
PLAN 61 2812127 9
Average 29.7 659029 -0.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 29.7 hedge funds with bullish positions and the average amount invested in these stocks was $659 million. That figure was $104 million in FHN’s case. Anaplan, Inc. (NYSE:PLAN) is the most popular stock in this table. On the other hand Oatly Group AB (NASDAQ:OTLY) is the least popular one with only 13 bullish hedge fund positions. First Horizon National Corporation (NYSE:FHN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FHN is 34. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 31.1% in 2021 through December 9th and surpassed the market again by 5.1 percentage points. Unfortunately FHN wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); FHN investors were disappointed as the stock returned 1.5% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.