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. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. In this article we are going to take a look at smart money sentiment towards Fulton Financial Corp (NASDAQ:FULT).
Is FULT a good stock to buy now? Hedge fund interest in Fulton Financial Corp (NASDAQ:FULT) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that FULT 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). 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 NMI Holdings Inc (NASDAQ:NMIH), Simulations Plus, Inc. (NASDAQ:SLP), and Azul S.A. (NYSE:AZUL) to gather more data points.
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. Now we’re going to view the fresh hedge fund action encompassing Fulton Financial Corp (NASDAQ:FULT).
Do Hedge Funds Think FULT Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards FULT over the last 21 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Among these funds, Holocene Advisors held the most valuable stake in Fulton Financial Corp (NASDAQ:FULT), which was worth $14.3 million at the end of the third quarter. On the second spot was AQR Capital Management which amassed $10.3 million worth of shares. GLG Partners, Citadel Investment Group, and Gardner Russo & Gardner 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 Holocene Advisors allocated the biggest weight to Fulton Financial Corp (NASDAQ:FULT), around 0.11% of its 13F portfolio. AQR Capital Management is also relatively very bullish on the stock, setting aside 0.02 percent of its 13F equity portfolio to FULT.
Judging by the fact that Fulton Financial Corp (NASDAQ:FULT) has faced falling interest from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of funds that elected to cut their entire stakes heading into Q4. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management cut the biggest investment of all the hedgies monitored by Insider Monkey, totaling close to $5.4 million in stock, and Minhua Zhang’s Weld Capital Management was right behind this move, as the fund said goodbye to about $0.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Fulton Financial Corp (NASDAQ:FULT) but similarly valued. We will take a look at NMI Holdings Inc (NASDAQ:NMIH), Simulations Plus, Inc. (NASDAQ:SLP), Azul S.A. (NYSE:AZUL), SkyWest, Inc. (NASDAQ:SKYW), Zealand Pharma A/S (NASDAQ:ZEAL), Air Transport Services Group Inc. (NASDAQ:ATSG), and Addus Homecare Corporation (NASDAQ:ADUS). All of these stocks’ market caps are similar to FULT’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 14 hedge funds with bullish positions and the average amount invested in these stocks was $84 million. That figure was $36 million in FULT’s case. Air Transport Services Group Inc. (NASDAQ:ATSG) is the most popular stock in this table. On the other hand Zealand Pharma A/S (NASDAQ:ZEAL) is the least popular one with only 3 bullish hedge fund positions. Fulton Financial Corp (NASDAQ:FULT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FULT is 66.8. 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. Hedge funds were also right about betting on FULT as the stock returned 42.7% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.