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Should You Buy Hancock Whitney Corporation (HWC)?

At Insider Monkey we follow around 700 of the best-performing investors and even though many of them lost money in the last couple of months (70% of hedge funds lost money in October whereas S&P 500 ETF lost about 7%), the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.

Is Hancock Whitney Corporation (NASDAQ:HWC) a superb stock to buy now? The best stock pickers are buying. The number of bullish hedge fund bets increased by 2 lately. Our calculations also showed that HWC isn’t among the 30 most popular stocks among hedge funds. HWC was in 24 hedge funds’ portfolios at the end of September. There were 22 hedge funds in our database with HWC positions at the end of the previous quarter.

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’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

CITADEL INVESTMENT GROUP

Let’s take a look at the new hedge fund action surrounding Hancock Whitney Corporation (NASDAQ:HWC).

How are hedge funds trading Hancock Whitney Corporation (NASDAQ:HWC)?

At Q3’s end, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards HWC over the last 13 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

HWC_dec2018

Among these funds, Citadel Investment Group held the most valuable stake in Hancock Whitney Corporation (NASDAQ:HWC), which was worth $55.1 million at the end of the third quarter. On the second spot was Millennium Management which amassed $18.4 million worth of shares. Moreover, Basswood Capital, Azora Capital, and Forest Hill Capital were also bullish on Hancock Whitney Corporation (NASDAQ:HWC), allocating a large percentage of their portfolios to this stock.

Consequently, some big names have been driving this bullishness. Soros Fund Management, managed by George Soros, initiated the biggest position in Hancock Whitney Corporation (NASDAQ:HWC). Soros Fund Management had $4.8 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $2.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Matthew Hulsizer’s PEAK6 Capital Management.

Let’s now review hedge fund activity in other stocks similar to Hancock Whitney Corporation (NASDAQ:HWC). These stocks are The Wendy’s Company (NASDAQ:WEN), AU Optronics Corp. (NYSE:AUO), Kosmos Energy Ltd (NYSE:KOS), and Apple Hospitality REIT Inc (NYSE:APLE). This group of stocks’ market valuations are similar to HWC’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WEN 27 1221248 3
AUO 10 56186 4
KOS 18 199526 3
APLE 10 94675 -2
Average 16.25 392909 2

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.25 hedge funds with bullish positions and the average amount invested in these stocks was $393 million. That figure was $192 million in HWC’s case. The Wendy’s Company (NASDAQ:WEN) is the most popular stock in this table. On the other hand AU Optronics Corp. (NYSE:AUO) is the least popular one with only 10 bullish hedge fund positions. Hancock Whitney Corporation (NASDAQ:HWC) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard WEN might be a better candidate to consider a long position.

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

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