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 Metlife Inc (NYSE:MET).
Is MET a good stock to buy now? Metlife Inc (NYSE:MET) has experienced an increase in hedge fund sentiment recently. Metlife Inc (NYSE:MET) was in 36 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 50. Our calculations also showed that MET 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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 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. With all of this in mind let’s take a gander at the fresh hedge fund action encompassing Metlife Inc (NYSE:MET).
Do Hedge Funds Think MET Is A Good Stock To Buy Now?
At Q3’s end, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MET over the last 21 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Ric Dillon’s Diamond Hill Capital has the most valuable position in Metlife Inc (NYSE:MET), worth close to $261.2 million, corresponding to 1.4% of its total 13F portfolio. On Diamond Hill Capital’s heels is Pzena Investment Management, led by Richard S. Pzena, holding a $202.6 million position; the fund has 1.3% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism consist of Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Cliff Asness’s AQR Capital Management and Noam Gottesman’s GLG Partners. In terms of the portfolio weights assigned to each position Diamond Hill Capital allocated the biggest weight to Metlife Inc (NYSE:MET), around 1.44% of its 13F portfolio. Pzena Investment Management is also relatively very bullish on the stock, designating 1.26 percent of its 13F equity portfolio to MET.
As one would reasonably expect, key hedge funds have been driving this bullishness. Balyasny Asset Management, managed by Dmitry Balyasny, established the most outsized position in Metlife Inc (NYSE:MET). Balyasny Asset Management had $13.7 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also made a $11.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Steve Cohen’s Point72 Asset Management, Jinghua Yan’s TwinBeech Capital, and Lee Ainslie’s Maverick Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Metlife Inc (NYSE:MET) but similarly valued. These stocks are IDEXX Laboratories, Inc. (NASDAQ:IDXX), CoStar Group Inc (NASDAQ:CSGP), Canadian Imperial Bank of Commerce (NYSE:CM), Ross Stores, Inc. (NASDAQ:ROST), Capital One Financial Corp. (NYSE:COF), Synopsys, Inc. (NASDAQ:SNPS), and Mizuho Financial Group Inc. (NYSE:MFG). This group of stocks’ market values match MET’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 33.3 hedge funds with bullish positions and the average amount invested in these stocks was $1159 million. That figure was $921 million in MET’s case. CoStar Group Inc (NASDAQ:CSGP) is the most popular stock in this table. On the other hand Mizuho Financial Group Inc. (NYSE:MFG) is the least popular one with only 5 bullish hedge fund positions. Metlife Inc (NYSE:MET) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MET is 62.6. 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 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on MET as the stock returned 24.3% since the end of Q3 (through 12/18) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.