Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Voya Financial Inc (NYSE:VOYA).
Is VOYA stock a buy or sell? Prominent investors were in a pessimistic mood. The number of bullish hedge fund positions were cut by 5 in recent months. Voya Financial Inc (NYSE:VOYA) was in 44 hedge funds’ portfolios at the end of December. The all time high for this statistic is 49. Our calculations also showed that VOYA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 49 hedge funds in our database with VOYA positions at the end of the third quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock that will deliver a 10x return. 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 homepage (or at the end of this article). Keeping this in mind we’re going to take a gander at the fresh hedge fund action surrounding Voya Financial Inc (NYSE:VOYA).
Do Hedge Funds Think VOYA Is A Good Stock To Buy Now?
At Q4’s end, a total of 44 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from the previous quarter. On the other hand, there were a total of 43 hedge funds with a bullish position in VOYA a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Samlyn Capital was the largest shareholder of Voya Financial Inc (NYSE:VOYA), with a stake worth $311 million reported as of the end of December. Trailing Samlyn Capital was Pzena Investment Management, which amassed a stake valued at $270.8 million. Empyrean Capital Partners, Citadel Investment Group, and Balyasny Asset Management 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 Strycker View Capital allocated the biggest weight to Voya Financial Inc (NYSE:VOYA), around 7.12% of its 13F portfolio. Samlyn Capital is also relatively very bullish on the stock, designating 4.45 percent of its 13F equity portfolio to VOYA.
Due to the fact that Voya Financial Inc (NYSE:VOYA) has witnessed declining sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of funds who were dropping their positions entirely in the fourth quarter. It’s worth mentioning that Emanuel J. Friedman’s EJF Capital sold off the largest stake of all the hedgies watched by Insider Monkey, worth an estimated $17.2 million in stock, and Michael Gelband’s ExodusPoint Capital was right behind this move, as the fund sold off about $11 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 5 funds in the fourth quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Voya Financial Inc (NYSE:VOYA) but similarly valued. These stocks are Juniper Networks, Inc. (NYSE:JNPR), Cenovus Energy Inc (NYSE:CVE), Skillz Inc. (NYSE:SKLZ), InVitae Corporation (NYSE:NVTA), Bausch Health Companies Inc.(NYSE:BHC), US Foods Holding Corp. (NYSE:USFD), and Arrow Electronics, Inc. (NYSE:ARW). This group of stocks’ market caps are closest to VOYA’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 33.7 hedge funds with bullish positions and the average amount invested in these stocks was $1334 million. That figure was $1190 million in VOYA’s case. US Foods Holding Corp. (NYSE:USFD) is the most popular stock in this table. On the other hand Cenovus Energy Inc (NYSE:CVE) is the least popular one with only 23 bullish hedge fund positions. Voya Financial Inc (NYSE:VOYA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VOYA is 76.9. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on VOYA as the stock returned 8.9% since the end of Q4 (through 3/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.