The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards State Auto Financial Corporation (NASDAQ:STFC).
Is STFC a good stock to buy now? State Auto Financial Corporation (NASDAQ:STFC) was in 8 hedge funds’ portfolios at the end of September. The all time high for this statistics is 8. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. STFC investors should be aware of an increase in hedge fund interest recently. There were 6 hedge funds in our database with STFC positions at the end of the second quarter. Our calculations also showed that STFC 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.
To most investors, hedge funds are viewed as worthless, outdated investment tools of yesteryear. While there are more than 8000 funds in operation today, We look at the elite of this group, around 850 funds. These investment experts oversee the lion’s share of the smart money’s total capital, and by shadowing their finest picks, Insider Monkey has spotted several investment strategies that have historically outpaced Mr. Market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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 go over the new hedge fund action regarding State Auto Financial Corporation (NASDAQ:STFC).
How have hedgies been trading State Auto Financial Corporation (NASDAQ:STFC)?
Heading into the fourth quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 33% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards STFC over the last 21 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in State Auto Financial Corporation (NASDAQ:STFC), which was worth $2.3 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $1.4 million worth of shares. D E Shaw, Millennium Management, and Arrowstreet Capital 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 Minerva Advisors allocated the biggest weight to State Auto Financial Corporation (NASDAQ:STFC), around 0.24% of its 13F portfolio. Tudor Investment Corp is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to STFC.
Consequently, specific money managers have jumped into State Auto Financial Corporation (NASDAQ:STFC) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the biggest position in State Auto Financial Corporation (NASDAQ:STFC). Arrowstreet Capital had $0.8 million invested in the company at the end of the quarter. David P. Cohen’s Minerva Advisors also made a $0.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Tudor Jones’s Tudor Investment Corp and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s go over hedge fund activity in other stocks similar to State Auto Financial Corporation (NASDAQ:STFC). These stocks are iClick Interactive Asia Group Limited (NASDAQ:ICLK), Relmada Therapeutics, Inc. (NASDAQ:RLMD), Hanger, Inc. (NYSE:HNGR), Impinj, Inc. (NASDAQ:PI), Camtek LTD. (NASDAQ:CAMT), Orthofix Medical Inc (NASDAQ:OFIX), and Calliditas Therapeutics AB (NASDAQ:CALT). This group of stocks’ market values are similar to STFC’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 12.6 hedge funds with bullish positions and the average amount invested in these stocks was $85 million. That figure was $7 million in STFC’s case. Impinj, Inc. (NASDAQ:PI) is the most popular stock in this table. On the other hand Relmada Therapeutics, Inc. (NASDAQ:RLMD) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks State Auto Financial Corporation (NASDAQ:STFC) is even less popular than RLMD. Our overall hedge fund sentiment score for STFC is 37. 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 STFC 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 STFC as the stock returned 14.2% since Q3 (through December 2nd) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.