The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider Fidelity National Financial Inc (NYSE:FNF) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is FNF stock a buy or sell? Fidelity National Financial Inc (NYSE:FNF) has experienced a decrease in hedge fund sentiment in recent months. Fidelity National Financial Inc (NYSE:FNF) was in 40 hedge funds’ portfolios at the end of December. The all time high for this statistic is 47. Our calculations also showed that FNF isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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 we’re going to analyze the new hedge fund action encompassing Fidelity National Financial Inc (NYSE:FNF).
Do Hedge Funds Think FNF Is A Good Stock To Buy Now?
At Q4’s end, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the third quarter of 2020. On the other hand, there were a total of 36 hedge funds with a bullish position in FNF a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Snehal Amin’s Windacre Partnership has the largest position in Fidelity National Financial Inc (NYSE:FNF), worth close to $503.4 million, comprising 13.2% of its total 13F portfolio. The second largest stake is held by Baupost Group, managed by Seth Klarman, which holds a $148.5 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish include Israel Englander’s Millennium Management, Farhad Nanji and Michael DeMichele’s MFN Partners and David Zorub’s Parsifal Capital Management. In terms of the portfolio weights assigned to each position Windacre Partnership allocated the biggest weight to Fidelity National Financial Inc (NYSE:FNF), around 13.23% of its 13F portfolio. Parsifal Capital Management is also relatively very bullish on the stock, dishing out 8.44 percent of its 13F equity portfolio to FNF.
Because Fidelity National Financial Inc (NYSE:FNF) has experienced declining sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of funds that decided to sell off their positions entirely in the fourth quarter. It’s worth mentioning that Gilchrist Berg’s Water Street Capital dropped the largest position of the “upper crust” of funds watched by Insider Monkey, worth about $15 million in stock. Usman Waheed’s fund, Strycker View Capital, also sold off its stock, about $7.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 4 funds in the fourth quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Fidelity National Financial Inc (NYSE:FNF) but similarly valued. We will take a look at Concho Resources Inc. (NYSE:CXO), WestRock Company (NYSE:WRK), DENTSPLY SIRONA Inc. (NASDAQ:XRAY), Equitable Holdings, Inc. (NYSE:EQH), Appian Corporation (NASDAQ:APPN), UDR, Inc. (NYSE:UDR), and Yatsen Holding Limited (NYSE:YSG). All of these stocks’ market caps match FNF’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $881 million. That figure was $1337 million in FNF’s case. Equitable Holdings, Inc. (NYSE:EQH) is the most popular stock in this table. On the other hand UDR, Inc. (NYSE:UDR) is the least popular one with only 23 bullish hedge fund positions. Fidelity National Financial Inc (NYSE:FNF) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FNF is 63.5. 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 positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately FNF wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on FNF were disappointed as the stock returned 1.5% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.