Smart Money Not Being Drawn to ICICI Bank Ltd (ADR) (IBN)

The SEC requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings discloses the funds’ positions on September 30. We at Insider Monkey have compiled an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded ICICI Bank Ltd (ADR) (NYSE:IBN) based on those filings.

Is ICICI Bank Ltd (ADR) (NYSE:IBN) an attractive investment right now? Investors who are in the know are getting more bullish. The number of bullish hedge fund positions moved up by 2 recently. IBN was in 22 hedge funds’ portfolios at the end of the third quarter of 2016. There were 20 hedge funds in our database with IBN positions at the end of the previous quarter. At the end of this article we will also compare IBN to other stocks including Credit Suisse Group AG (ADR) (NYSE:CS), Newmont Mining Corp (NYSE:NEM), and Illumina, Inc. (NASDAQ:ILMN) 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.

How have hedgies been trading ICICI Bank Ltd (ADR) (NYSE:IBN)?

At Q3’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 10% uptick from the second quarter of 2016, though that followed a steep drop in ownership a few quarters ago. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Fisher’s Fisher Asset Management has the largest position in ICICI Bank Ltd (ADR) (NYSE:IBN), worth close to $86.8 million. Coming in second is Simon Sadler of Segantii Capital, with a $56.4 million position; the fund has 15.3% of its 13F portfolio invested in the stock. Other peers that hold long positions consist of D E Shaw, Howard Marks’ Oaktree Capital Management and Cliff Asness’ AQR Capital Management.

As industry-wide interest jumped, key hedge funds were leading the bulls’ herd. Millennium Management, managed by Israel Englander, established the most valuable position in ICICI Bank Ltd (ADR) (NYSE:IBN). Millennium Management had $1.2 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew Tewksbury’s Stevens Capital Management and Louis Navellier’s Navellier & Associates.

Let’s now take a look at hedge fund activity in other stocks similar to ICICI Bank Ltd (ADR) (NYSE:IBN). We will take a look at Credit Suisse Group AG (ADR) (NYSE:CS), Newmont Mining Corp (NYSE:NEM), Illumina, Inc. (NASDAQ:ILMN), and Wisconsin Energy Corporation (NYSE:WEC). This group of stocks’ market caps are similar to IBN’s market cap.

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 $386 million. That figure was $413 million in IBN’s case. Newmont Mining Corp (NYSE:NEM) is the most popular stock in this table. On the other hand Credit Suisse Group AG (ADR) (NYSE:CS) is the least popular one with only 13 bullish hedge fund positions. ICICI Bank Ltd (ADR) (NYSE:IBN) 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 hedge funds are piling on. In this regard NEM might be a better candidate to consider a long position in.

Disclosure: None