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.
Voya Financial Inc (NYSE:VOYA) was in 38 hedge funds’ portfolios at the end of the third quarter of 2016. VOYA investors should be aware of an increase in hedge fund interest recently. There were 37 hedge funds in our database with VOYA positions at the end of the previous quarter. At the end of this article we will also compare VOYA to other stocks including Tegna Inc (NYSE:TGNA), Old Dominion Freight Line (NASDAQ:ODFL), and Gaming and Leisure Properties Inc (NASDAQ:GLPI) to get a better sense of its popularity.
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.
What have hedge funds been doing with Voya Financial Inc (NYSE:VOYA)?
Heading into the fourth quarter of 2016, a total of 38 of the hedge funds tracked by Insider Monkey were long this stock, up by 3% from one quarter earlier, pushing hedge fund ownership to its highest point in the last year. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Pzena Investment Management, managed by Richard S. Pzena, holds the number one position in Voya Financial Inc (NYSE:VOYA). The fund has a $492.2 million position in the stock, comprising 3% of its 13F portfolio. On Pzena Investment Management’s heels is David Einhorn of Greenlight Capital, with a $149 million position; the fund has 2.8% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions comprise D E Shaw, Christian Leone’s Luxor Capital Group, and Joe Huber’s Huber Capital Management.
As industrywide interest jumped, key money managers were leading the bulls’ herd. Luxor Capital Group assembled the most outsized position in Voya Financial Inc (NYSE:VOYA). The fund reportedly had $60.7 million invested in the company at the end of the quarter. Jim Simons’ Renaissance Technologies also initiated a $16.8 million position during the quarter. The following funds were also among the new VOYA investors: John A. Levin’s Levin Capital Strategies, Neal Shah’s Valtura Capital Partners, and David Rodriguez-Fraile’s BlueMar Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Voya Financial Inc (NYSE:VOYA). These stocks are Tegna Inc (NYSE:TGNA), Old Dominion Freight Line (NASDAQ:ODFL), Gaming and Leisure Properties Inc (NASDAQ:GLPI), and TAL Education Group (ADR) (NYSE:XRS). This group of stocks’ market caps resemble VOYA’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 24 hedge funds with bullish positions and the average amount invested in these stocks was $451 million. That figure was $1.16 billion in VOYA’s case. Gaming and Leisure Properties Inc (NASDAQ:GLPI) is the most popular stock in this table. On the other hand Old Dominion Freight Line (NASDAQ:ODFL) is the least popular one with only 14 bullish hedge fund positions. Compared to these stocks Voya Financial Inc (NYSE:VOYA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.