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Should I Buy Huntington Bancshares Incorporated (HBAN)?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Huntington Bancshares Incorporated (NASDAQ:HBAN) based on that data and determine whether they were really smart about the stock.

Is Huntington Bancshares Incorporated (NASDAQ:HBAN) the right investment to pursue these days? Hedge funds were in a bullish mood. The number of bullish hedge fund positions advanced by 1 recently. Huntington Bancshares Incorporated (NASDAQ:HBAN) was in 30 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 40. Our calculations also showed that HBAN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 29 hedge funds in our database with HBAN positions at the end of the first quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

To the average investor there are tons of indicators stock traders employ to analyze their holdings. Some of the most useful indicators are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the best hedge fund managers can outclass the market by a very impressive margin (see the details here).

David Harding

David Harding of Winton Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, this “mom” trader turned $2000 into $2 million within 2 years. So, we are checking out her best trade idea of the month. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world 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. With all of this in mind let’s take a glance at the recent hedge fund action encompassing Huntington Bancshares Incorporated (NASDAQ:HBAN).

How are hedge funds trading Huntington Bancshares Incorporated (NASDAQ:HBAN)?

At the end of the second quarter, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from one quarter earlier. By comparison, 23 hedge funds held shares or bullish call options in HBAN 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.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Citadel Investment Group, managed by Ken Griffin, holds the largest position in Huntington Bancshares Incorporated (NASDAQ:HBAN). Citadel Investment Group has a $35.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. On Citadel Investment Group’s heels is Brandon Haley of Holocene Advisors, with a $26.9 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that are bullish consist of Israel Englander’s Millennium Management, and Jeremy Hosking’s Hosking Partners. In terms of the portfolio weights assigned to each position Mendon Capital Advisors allocated the biggest weight to Huntington Bancshares Incorporated (NASDAQ:HBAN), around 0.69% of its 13F portfolio. Sciencast Management is also relatively very bullish on the stock, setting aside 0.52 percent of its 13F equity portfolio to HBAN.

As one would reasonably expect, specific money managers have been driving this bullishness. Tudor Investment Corp, managed by Paul Tudor Jones, assembled the largest position in Huntington Bancshares Incorporated (NASDAQ:HBAN). Tudor Investment Corp had $2.3 million invested in the company at the end of the quarter. Qing Li’s Sciencast Management also initiated a $2.1 million position during the quarter. The other funds with brand new HBAN positions are Anton Schutz’s Mendon Capital Advisors, Lee Ainslie’s Maverick Capital, and David Harding’s Winton Capital Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Huntington Bancshares Incorporated (NASDAQ:HBAN) but similarly valued. We will take a look at Zynga Inc (NASDAQ:ZNGA), PulteGroup, Inc. (NYSE:PHM), Suzano S.A. (NYSE:SUZ), Vistra Corp. (NYSE:VST), MGM Growth Properties LLC (NYSE:MGP), Kinross Gold Corporation (NYSE:KGC), and PTC Inc (NASDAQ:PTC). All of these stocks’ market caps match HBAN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ZNGA 52 1094586 -7
PHM 42 866135 6
SUZ 3 28866 0
VST 42 1561642 3
MGP 32 569697 4
KGC 30 806038 2
PTC 40 1255947 5
Average 34.4 883273 1.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 34.4 hedge funds with bullish positions and the average amount invested in these stocks was $883 million. That figure was $90 million in HBAN’s case. Zynga Inc (NASDAQ:ZNGA) is the most popular stock in this table. On the other hand Suzano S.A. (NYSE:SUZ) is the least popular one with only 3 bullish hedge fund positions. Huntington Bancshares Incorporated (NASDAQ:HBAN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HBAN is 56.1. 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 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 23.8% in 2020 through September 14th and still beat the market by 17.6 percentage points. A small number of hedge funds were also right about betting on HBAN as the stock returned 11.9% since the end of June (through September 14th) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.