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 821 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 March 31st, a week after the market trough. In this article we look at what those investors think of Truist Financial Corporation (NYSE:TFC).
Is Truist Financial Corporation (NYSE:TFC) a buy right now? Money managers are getting less bullish. The number of long hedge fund bets decreased by 1 recently. Our calculations also showed that TFC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). TFC was in 34 hedge funds’ portfolios at the end of March. There were 35 hedge funds in our database with TFC positions at the end of the previous quarter.
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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 51 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely 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, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to view the fresh hedge fund action encompassing Truist Financial Corporation (NYSE:TFC).
What does smart money think about Truist Financial Corporation (NYSE:TFC)?
Heading into the second quarter of 2020, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards TFC over the last 18 quarters. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
More specifically, Citadel Investment Group was the largest shareholder of Truist Financial Corporation (NYSE:TFC), with a stake worth $243.7 million reported as of the end of September. Trailing Citadel Investment Group was Carlson Capital, which amassed a stake valued at $68.8 million. Adage Capital Management, Balyasny Asset 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 Prana Capital Management allocated the biggest weight to Truist Financial Corporation (NYSE:TFC), around 4.03% of its 13F portfolio. Gillson Capital is also relatively very bullish on the stock, earmarking 3.48 percent of its 13F equity portfolio to TFC.
Due to the fact that Truist Financial Corporation (NYSE:TFC) has witnessed falling interest from the aggregate hedge fund industry, logic holds that there was a specific group of fund managers who were dropping their full holdings last quarter. It’s worth mentioning that Noam Gottesman’s GLG Partners dumped the largest stake of the “upper crust” of funds tracked by Insider Monkey, valued at close to $22.9 million in stock, and Ray Dalio’s Bridgewater Associates was right behind this move, as the fund cut about $8.9 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 1 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Truist Financial Corporation (NYSE:TFC) but similarly valued. We will take a look at Relx PLC (NYSE:RELX), Baxter International Inc. (NYSE:BAX), PNC Financial Services Group Inc. (NYSE:PNC), and NetEase, Inc (NASDAQ:NTES). All of these stocks’ market caps match TFC’s market cap.
|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 33.5 hedge funds with bullish positions and the average amount invested in these stocks was $1964 million. That figure was $551 million in TFC’s case. Baxter International Inc. (NYSE:BAX) is the most popular stock in this table. On the other hand Relx PLC (NYSE:RELX) is the least popular one with only 5 bullish hedge fund positions. Truist Financial Corporation (NYSE:TFC) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on TFC as the stock returned 21% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.