Is State Street Corp (STT) Going to Burn These Hedge Funds?

Because State Street Corp (NYSE:STT) has witnessed a decline in interest from the smart money, it’s safe to say that there were a few hedgies that slashed their entire stakes in the third quarter. At the top of the heap, David E. Shaw’s D E Shaw sold off the biggest stake of the “upper crust” of funds monitored by Insider Monkey, totaling an estimated $14.4 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund said goodbye to about $14.4 million worth of STT shares. These moves are interesting, as aggregate hedge fund interest was cut by 2 funds in the third quarter.

Let’s now review hedge fund activity in other stocks similar to State Street Corp (NYSE:STT). We will take a look at Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), Edwards Lifesciences Corp (NYSE:EW), Synchrony Financial (NYSE:SYF), and Apache Corporation (NYSE:APA). This group of stocks’ market values are similar to STT’s market value.

As you can see these stocks had an average of 38 hedge funds with bullish positions and the average amount invested in these stocks was $1.94 billion. That figure was $634 million in STT’s case. Synchrony Financial (NYSE:SYF) is the most popular stock in this table. On the other hand Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is the least popular one with only 33 bullish hedge fund positions. Compared to these stocks State Street Corp (NYSE:STT) is even less popular than VRTX and APA. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None