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 at Insider Monkey have plowed through 817 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, about a month before the elections. In this article we look at what those investors think of Heartland Financial USA Inc (NASDAQ:HTLF).
Is Heartland Financial USA Inc (NASDAQ:HTLF) a good stock to buy right now? Money managers were buying. The number of bullish hedge fund bets improved by 2 recently. Heartland Financial USA Inc (NASDAQ:HTLF) was in 7 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 13. Our calculations also showed that HTLF 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 21st century investor’s toolkit there are a lot of methods market participants employ to grade their holdings. A duo of the most underrated methods are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the best fund managers can outpace their index-focused peers by a healthy margin (see the details here).
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 recent hedge fund action regarding Heartland Financial USA Inc (NASDAQ:HTLF).
How have hedgies been trading Heartland Financial USA Inc (NASDAQ:HTLF)?
Heading into the fourth quarter of 2020, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 40% from the second quarter of 2020. By comparison, 10 hedge funds held shares or bullish call options in HTLF a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
More specifically, Millennium Management was the largest shareholder of Heartland Financial USA Inc (NASDAQ:HTLF), with a stake worth $5 million reported as of the end of September. Trailing Millennium Management was ExodusPoint Capital, which amassed a stake valued at $1.5 million. AQR Capital Management, Arrowstreet Capital, and Two Sigma Advisors 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 ExodusPoint Capital allocated the biggest weight to Heartland Financial USA Inc (NASDAQ:HTLF), around 0.03% of its 13F portfolio. Bailard Inc is also relatively very bullish on the stock, designating 0.02 percent of its 13F equity portfolio to HTLF.
Now, specific money managers were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the largest position in Heartland Financial USA Inc (NASDAQ:HTLF). Arrowstreet Capital had $1.1 million invested in the company at the end of the quarter. Thomas Bailard’s Bailard Inc also made a $0.5 million investment in the stock during the quarter. The only other fund with a brand new HTLF position is D. E. Shaw’s D E Shaw.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Heartland Financial USA Inc (NASDAQ:HTLF) but similarly valued. We will take a look at Allegheny Technologies Incorporated (NYSE:ATI), HudBay Minerals Inc (NYSE:HBM), Independence Realty Trust Inc (NYSE:IRT), Harsco Corporation (NYSE:HSC), Supernus Pharmaceuticals Inc (NASDAQ:SUPN), Griffon Corporation (NYSE:GFF), and NGM Biopharmaceuticals, Inc. (NASDAQ:NGM). This group of stocks’ market values are similar to HTLF’s market value.
|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 15.4 hedge funds with bullish positions and the average amount invested in these stocks was $135 million. That figure was $11 million in HTLF’s case. Griffon Corporation (NYSE:GFF) is the most popular stock in this table. On the other hand Independence Realty Trust Inc (NYSE:IRT) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Heartland Financial USA Inc (NASDAQ:HTLF) is even less popular than IRT. Our overall hedge fund sentiment score for HTLF is 23.2. 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. Hedge funds clearly dropped the ball on HTLF as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 31.6% in 2020 through December 2nd and still beat the market by 16 percentage points. A small number of hedge funds were also right about betting on HTLF as the stock returned 36.3% since Q3 (through December 2nd) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.