Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Intuit Inc. (NASDAQ:INTU), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is INTU a good stock to buy now? Intuit Inc. (NASDAQ:INTU) investors should pay attention to an increase in enthusiasm from smart money lately. Intuit Inc. (NASDAQ:INTU) was in 54 hedge funds’ portfolios at the end of September. The all time high for this statistics is 55. There were 53 hedge funds in our database with INTU holdings at the end of June. Our calculations also showed that INTU 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 leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets. Tesla’s stock price skyrocketed, yet lithium prices are still below their 2019 highs. So, we are checking out this lithium stock right now. We go through lists like the 15 best blue chip stocks to buy 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. Keeping this in mind let’s check out the fresh hedge fund action regarding Intuit Inc. (NASDAQ:INTU).
How are hedge funds trading Intuit Inc. (NASDAQ:INTU)?
At Q3’s end, a total of 54 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 2% from the second quarter of 2020. By comparison, 55 hedge funds held shares or bullish call options in INTU 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.
The largest stake in Intuit Inc. (NASDAQ:INTU) was held by AQR Capital Management, which reported holding $313.8 million worth of stock at the end of September. It was followed by GLG Partners with a $240.8 million position. Other investors bullish on the company included Two Sigma Advisors, Arrowstreet Capital, and Echo Street Capital Management. In terms of the portfolio weights assigned to each position Blue Whale Capital allocated the biggest weight to Intuit Inc. (NASDAQ:INTU), around 6.11% of its 13F portfolio. Bristol Gate Capital Partners is also relatively very bullish on the stock, dishing out 4.62 percent of its 13F equity portfolio to INTU.
As aggregate interest increased, some big names have been driving this bullishness. Intermede Investment Partners, managed by Barry Dargan, assembled the most valuable position in Intuit Inc. (NASDAQ:INTU). Intermede Investment Partners had $73.7 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $69.2 million position during the quarter. The other funds with brand new INTU positions are Steve Cohen’s Point72 Asset Management, Matthew Hulsizer’s PEAK6 Capital Management, and Brad Dunkley and Blair Levinsky’s Waratah Capital Advisors.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Intuit Inc. (NASDAQ:INTU) but similarly valued. We will take a look at Toronto-Dominion Bank (NYSE:TD), Intuitive Surgical, Inc. (NASDAQ:ISRG), British American Tobacco plc (NYSE:BTI), Mondelez International Inc (NASDAQ:MDLZ), Caterpillar Inc. (NYSE:CAT), American Express Company (NYSE:AXP), and Diageo plc (NYSE:DEO). This group of stocks’ market values match INTU’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 32.9 hedge funds with bullish positions and the average amount invested in these stocks was $3847 million. That figure was $1823 million in INTU’s case. Intuitive Surgical, Inc. (NASDAQ:ISRG) is the most popular stock in this table. On the other hand British American Tobacco plc (NYSE:BTI) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Intuit Inc. (NASDAQ:INTU) is more popular among hedge funds. Our overall hedge fund sentiment score for INTU is 85.5. 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. 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. Unfortunately INTU wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on INTU were disappointed as the stock returned 9.2% since the end of the third quarter (through 12/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.