Stellantis N.V. (STLA): Are Hedge Funds Right About This Stock?

In this article we will check out the progression of hedge fund sentiment towards Stellantis N.V. (NYSE:STLA) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Is Stellantis N.V. (NYSE:STLA) the right investment to pursue these days? Prominent investors were in an optimistic mood. The number of long hedge fund positions improved by 6 in recent months. Stellantis N.V. (NYSE:STLA) was in 21 hedge funds’ portfolios at the end of March. The all time high for this statistic is 36. Our calculations also showed that STLA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 15 hedge funds in our database with STLA holdings at the end of December.

To the average investor there are plenty of methods investors use to grade publicly traded companies. Some of the most useful methods are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the elite investment managers can beat their index-focused peers by a significant amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Ken Heebner of Capital Growth Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s go over the fresh hedge fund action encompassing Stellantis N.V. (NYSE:STLA).

Do Hedge Funds Think STLA Is A Good Stock To Buy Now?

At first quarter’s end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 40% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards STLA over the last 23 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is STLA A Good Stock To Buy?

Among these funds, Arrowstreet Capital held the most valuable stake in Stellantis N.V. (NYSE:STLA), which was worth $491 million at the end of the fourth quarter. On the second spot was Two Sigma Advisors which amassed $52.7 million worth of shares. Rokos Capital Management, Citadel Investment Group, and Capital Growth Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Ancient Art (Teton Capital) allocated the biggest weight to Stellantis N.V. (NYSE:STLA), around 3.09% of its 13F portfolio. Capital Growth Management is also relatively very bullish on the stock, designating 3.01 percent of its 13F equity portfolio to STLA.

As industrywide interest jumped, key hedge funds were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the biggest position in Stellantis N.V. (NYSE:STLA). Arrowstreet Capital had $491 million invested in the company at the end of the quarter. Chris Rokos’s Rokos Capital Management also initiated a $43.7 million position during the quarter. The other funds with new positions in the stock are Phill Gross and Robert Atchinson’s Adage Capital Management, Nicholas Bagnall’s Te Ahumairangi Investment Management, and Charles Davidson and Joseph Jacobs’s Wexford Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Stellantis N.V. (NYSE:STLA) but similarly valued. We will take a look at ICICI Bank Limited (NYSE:IBN), UBS Group AG (NYSE:UBS), Eaton Corporation plc (NYSE:ETN), Boston Scientific Corporation (NYSE:BSX), Waste Management, Inc. (NYSE:WM), Emerson Electric Co. (NYSE:EMR), and Humana Inc (NYSE:HUM). All of these stocks’ market caps resemble STLA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IBN 31 1903240 2
UBS 16 342177 -2
ETN 49 1094688 8
BSX 44 2884401 -14
WM 32 3290087 -5
EMR 45 796035 -1
HUM 53 2878475 -6
Average 38.6 1884158 -2.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 38.6 hedge funds with bullish positions and the average amount invested in these stocks was $1884 million. That figure was $752 million in STLA’s case. Humana Inc (NYSE:HUM) is the most popular stock in this table. On the other hand UBS Group AG (NYSE:UBS) is the least popular one with only 16 bullish hedge fund positions. Stellantis N.V. (NYSE:STLA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for STLA is 34.3. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately STLA wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); STLA investors were disappointed as the stock returned 5.1% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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