Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the fourth quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Visa Inc (NYSE:V) based on that data.
Is Visa Inc (NYSE:V) an attractive stock to buy now? The smart money was turning bullish. The number of long hedge fund bets increased by 6 in recent months. Visa Inc (NYSE:V) was in 166 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic was previously 160. This means the bullish number of hedge fund positions in this stock reached a brand new all time high. Our calculations also showed that V ranked #5 among the 30 most popular stocks among hedge funds (click for Q4 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 website. With all of this in mind let’s check out the new hedge fund action surrounding Visa Inc (NYSE:V).
Do Hedge Funds Think V Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 166 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from the previous quarter. By comparison, 143 hedge funds held shares or bullish call options in V a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
More specifically, Fisher Asset Management was the largest shareholder of Visa Inc (NYSE:V), with a stake worth $4860.3 million reported as of the end of December. Trailing Fisher Asset Management was Berkshire Hathaway, which amassed a stake valued at $2184.6 million. Fundsmith LLP, Akre Capital Management, and GQG Partners 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 Truvvo Partners allocated the biggest weight to Visa Inc (NYSE:V), around 29.28% of its 13F portfolio. Hengistbury Investment Partners is also relatively very bullish on the stock, designating 25.02 percent of its 13F equity portfolio to V.
With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Rokos Capital Management, managed by Chris Rokos, assembled the most outsized position in Visa Inc (NYSE:V). Rokos Capital Management had $58.9 million invested in the company at the end of the quarter. Richard Driehaus’s Driehaus Capital also initiated a $56.2 million position during the quarter. The other funds with new positions in the stock are Jack Woodruff’s Candlestick Capital Management, Leon Shaulov’s Maplelane Capital, and Anthony Joseph Vaccarino’s North Fourth Asset Management.
Let’s now take a look at hedge fund activity in other stocks similar to Visa Inc (NYSE:V). These stocks are Johnson & Johnson (NYSE:JNJ), Walmart Inc. (NYSE:WMT), JPMorgan Chase & Co. (NYSE:JPM), Mastercard Incorporated (NYSE:MA), The Procter & Gamble Company (NYSE:PG), UnitedHealth Group Inc. (NYSE:UNH), and The Walt Disney Company (NYSE:DIS). This group of stocks’ market valuations resemble V’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JNJ | 81 | 5820696 | -1 |
| WMT | 70 | 6197019 | 1 |
| JPM | 112 | 6967178 | -6 |
| MA | 154 | 17978734 | 21 |
| PG | 83 | 10421985 | 8 |
| UNH | 91 | 10778450 | 2 |
| DIS | 144 | 16417240 | 32 |
| Average | 105 | 10654472 | 8.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 105 hedge funds with bullish positions and the average amount invested in these stocks was $10654 million. That figure was $23599 million in V’s case. Mastercard Incorporated (NYSE:MA) is the most popular stock in this table. On the other hand Walmart Inc. (NYSE:WMT) is the least popular one with only 70 bullish hedge fund positions. Compared to these stocks Visa Inc (NYSE:V) is more popular among hedge funds. Our overall hedge fund sentiment score for V is 98. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Unfortunately V wasn’t nearly as successful as these 30 stocks and hedge funds that were betting on V were disappointed as the stock returned 3.4% since the end of the fourth quarter (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
