The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Voya Financial Inc (NYSE:VOYA) based on those filings.
Is Voya Financial Inc (NYSE:VOYA) ready to rally soon? Prominent investors were in an optimistic mood. The number of long hedge fund bets improved by 8 lately. Voya Financial Inc (NYSE:VOYA) was in 49 hedge funds’ portfolios at the end of September. The all time high for this statistic is 45. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that VOYA 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). There were 41 hedge funds in our database with VOYA positions at the end of the second 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 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.
Robert Pohly of Samlyn Capital
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 cannabis tech 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. Keeping this in mind let’s take a glance at the latest hedge fund action surrounding Voya Financial Inc (NYSE:VOYA).
Do Hedge Funds Think VOYA Is A Good Stock To Buy Now?
At third quarter’s end, a total of 49 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the second quarter of 2020. By comparison, 40 hedge funds held shares or bullish call options in VOYA a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Voya Financial Inc (NYSE:VOYA) was held by Samlyn Capital, which reported holding $295 million worth of stock at the end of September. It was followed by Pzena Investment Management with a $225.9 million position. Other investors bullish on the company included Citadel Investment Group, Levin Easterly Partners, and Millennium Management. In terms of the portfolio weights assigned to each position Strycker View Capital allocated the biggest weight to Voya Financial Inc (NYSE:VOYA), around 10.9% of its 13F portfolio. Samlyn Capital is also relatively very bullish on the stock, setting aside 5.31 percent of its 13F equity portfolio to VOYA.
As one would reasonably expect, key hedge funds were breaking ground themselves. Levin Easterly Partners, managed by John Murphy, established the most valuable position in Voya Financial Inc (NYSE:VOYA). Levin Easterly Partners had $86.2 million invested in the company at the end of the quarter. Emanuel J. Friedman’s EJF Capital also initiated a $17.2 million position during the quarter. The other funds with new positions in the stock are Peter Seuss’s Prana Capital Management, Gregg Moskowitz’s Interval Partners, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s now take a look at hedge fund activity in other stocks similar to Voya Financial Inc (NYSE:VOYA). These stocks are Sealed Air Corporation (NYSE:SEE), Steel Dynamics, Inc. (NASDAQ:STLD), MKS Instruments, Inc. (NASDAQ:MKSI), OGE Energy Corp. (NYSE:OGE), National Retail Properties, Inc. (NYSE:NNN), Kilroy Realty Corp (NYSE:KRC), and Credit Acceptance Corp. (NASDAQ:CACC). All of these stocks’ market caps match VOYA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SEE | 31 | 933728 | 3 |
| STLD | 28 | 459515 | -2 |
| MKSI | 35 | 313184 | 3 |
| OGE | 22 | 215851 | -3 |
| NNN | 16 | 122717 | -1 |
| KRC | 19 | 327802 | -1 |
| CACC | 29 | 673470 | 6 |
| Average | 25.7 | 435181 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.7 hedge funds with bullish positions and the average amount invested in these stocks was $435 million. That figure was $1104 million in VOYA’s case. MKS Instruments, Inc. (NASDAQ:MKSI) is the most popular stock in this table. On the other hand National Retail Properties, Inc. (NYSE:NNN) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Voya Financial Inc (NYSE:VOYA) is more popular among hedge funds. Our overall hedge fund sentiment score for VOYA is 90. 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 returned 32.9% in 2020 through December 8th but still managed to beat the market by 16.2 percentage points. Hedge funds were also right about betting on VOYA as the stock returned 22.2% since the end of September (through 12/8) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.
