Is V.F. Corporation (VFC) Going to Burn These Hedge Funds?

How do you pick the next stock to invest in? One way would be to spend hours of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding V.F. Corporation (NYSE:VFC).

Is V.F. Corporation (NYSE:VFC) a first-rate stock to buy now? Prominent investors are taking a pessimistic view. The number of bullish hedge fund bets shrunk by 2 lately.

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Today there are a lot of indicators stock traders have at their disposal to value stocks. A couple of the best indicators are hedge fund and insider trading sentiment. Experts at hedge fund tracking site Insider Monkey have shown that, historically, those who follow the top picks of the elite fund managers can beat the broader indices by a healthy amount (see the details here).

With all of this in mind, we’re going to take a look at the fresh action encompassing V.F. Corporation (NYSE:VFC).

What does the smart money think about V.F. Corporation (NYSE:VFC)?

At the end of the third quarter, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from the previous quarter. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their stakes significantly.

When looking at the hedgies followed by Insider Monkey, Ken Griffin’s Citadel Investment Group had the most valuable position in V.F. Corporation (NYSE:VFC), worth close to $223.8 million, comprising 0.2% of its total 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which held a $119.1 million position; 0.2% of its 13F portfolio is allocated to the company. Remaining hedgies that hold long positions comprise Israel Englander’s Millennium Management, D. E. Shaw’s D E Shaw and Benjamin A. Smith’s Laurion Capital Management.

Judging by the fact that V.F. Corporation (NYSE:VFC) has faced falling interest from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of funds that elected to cut their entire stakes last quarter. It’s worth mentioning that John Overdeck and David Siegel’s Two Sigma Advisors cut the largest stake of all the hedgies tracked by Insider Monkey, totaling close to $7.5 million in stock. Greg Poole’s fund, Echo Street Capital Management, also cut its stock, about $6.6 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 2 funds last quarter.

Let’s also examine hedge fund activity in other stocks similar to V.F. Corporation (NYSE:VFC). We will take a look at Emerson Electric Co. (NYSE:EMR), Canadian Imperial Bank of Commerce (USA) (NYSE:CM), Petroleo Brasileiro Petrobras SA (ADR) (NYSE:PBR), and Becton, Dickinson and Co. (NYSE:BDX). This group of stocks’ market valuations are closest to VFC’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EMR 34 682178 -6
CM 14 201878 3
PBR 24 199104 -7
BDX 36 1158913 1

With the returns shown by Insider Monkey’s strategies, everyday investors must always watch hedge fund activity, and V.F. Corporation (NYSE:VFC) is no exception.