Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
Is Fidelity National Financial Inc (NYSE:FNFV) the right investment to pursue these days? The smart money is reducing their bets on the stock. The number of long hedge fund bets went down by 1 in recent months. FNFV was in 19 hedge funds’ portfolios at the end of September. There were 20 hedge funds in our database with FNFV holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Portland General Electric Company (NYSE:POR), Gulfport Energy Corporation (NASDAQ:GPOR), and Charles River Laboratories (NYSE:CRL) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
How have hedgies been trading Fidelity National Financial Inc (NYSE:FNFV)?
Heading into the fourth quarter of 2016, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, down by 5% from one quarter earlier, and well off the ownership heights of a year earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ricky Sandler’s Eminence Capital has the number one position in Fidelity National Financial Inc (NYSE:FNFV), worth close to $77.1 million and accounting for 1.3% of its total 13F portfolio. Sitting at the No. 2 spot is Highfields Capital Management, led by Jonathon Jacobson, holding a $54.9 million position. Other peers that hold long positions include John W. Moon’s Moon Capital, Leon Lowenstein’s Lionstone Capital Management, and Seth Rosen’s Nitorum Capital.
Since Fidelity National Financial Inc (NYSE:FNFV) has faced a decline in interest from hedge fund managers, it’s safe to say that there were a few hedgies who sold off their full holdings last quarter. Intriguingly, John Khoury’s Long Pond Capital dropped the largest stake of the 700 funds tracked by Insider Monkey, valued at close to $7.7 million in stock, and Israel Englander’s Millennium Management was right behind this move, as the fund said goodbye to about $0.5 million worth of shares. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 1 fund last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Fidelity National Financial Inc (NYSE:FNFV) but similarly valued. We will take a look at Portland General Electric Company (NYSE:POR), Gulfport Energy Corporation (NASDAQ:GPOR), Charles River Laboratories (NYSE:CRL), and AGCO Corporation (NYSE:AGCO). All of these stocks’ market caps match FNFV’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $519 million. That figure was just $206 million in FNFV’s case. Gulfport Energy Corporation (NASDAQ:GPOR) is the most popular stock in this table. On the other hand Portland General Electric Company (NYSE:POR) is the least popular one with only 13 bullish hedge fund positions. Fidelity National Financial Inc (NYSE:FNFV) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that a lot of hedge funds own. In this regard GPOR might be a better candidate to consider taking a long position in.