Were Hedge Funds Right About Souring On Credicorp Ltd. (BAP)?

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Tiger Global because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

Is Credicorp Ltd. (NYSE:BAP) a good investment now? Hedge funds are in a bearish mood. The number of bullish hedge fund bets were trimmed by 1 lately. Our calculations also showed that BAP isn’t among the 30 most popular stocks among hedge funds.

Today there are several indicators shareholders put to use to assess stocks. Some of the most underrated indicators are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the best hedge fund managers can outclass their index-focused peers by a very impressive amount (see the details here).

Jeffrey Talpins Element Capital

We’re going to take a gander at the fresh hedge fund action regarding Credicorp Ltd. (NYSE:BAP).

How have hedgies been trading Credicorp Ltd. (NYSE:BAP)?

Heading into the first quarter of 2019, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BAP over the last 14 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.


More specifically, Generation Investment Management was the largest shareholder of Credicorp Ltd. (NYSE:BAP), with a stake worth $343.4 million reported as of the end of September. Trailing Generation Investment Management was Fisher Asset Management, which amassed a stake valued at $275.8 million. AQR Capital Management, Arrowstreet Capital, and Driehaus Capital were also very fond of the stock, giving the stock large weights in their portfolios.

Since Credicorp Ltd. (NYSE:BAP) has faced falling interest from the smart money, it’s easy to see that there lies a certain “tier” of funds who were dropping their full holdings in the third quarter. It’s worth mentioning that Paul Marshall and Ian Wace’s Marshall Wace LLP dumped the biggest position of all the hedgies watched by Insider Monkey, worth about $1.5 million in stock. Jeffrey Talpins’s fund, Element Capital Management, also said goodbye to its stock, about $0.4 million worth. These transactions are interesting, as total hedge fund interest dropped by 1 funds in the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Credicorp Ltd. (NYSE:BAP) but similarly valued. We will take a look at POSCO (NYSE:PKX), Cheniere Energy Partners LP (NYSEAMEX:CQP), Boston Properties, Inc. (NYSE:BXP), and SK Telecom Co., Ltd. (NYSE:SKM). All of these stocks’ market caps are similar to BAP’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PKX 15 119192 1
CQP 4 14561 0
BXP 17 348411 0
SKM 6 88249 1
Average 10.5 142603 0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $143 million. That figure was $784 million in BAP’s case. Boston Properties, Inc. (NYSE:BXP) is the most popular stock in this table. On the other hand Cheniere Energy Partners LP (NYSEAMEX:CQP) is the least popular one with only 4 bullish hedge fund positions. Credicorp Ltd. (NYSE:BAP) 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. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Unfortunately BAP wasn’t in this group. Hedge funds that bet on BAP were disappointed as the stock returned 12% and underperformed the market. If you are interested in investing in large cap stocks, you should check out the top 15 hedge fund stocks as 13 of these outperformed the market.

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