After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Wells Fargo & Company (NYSE:WFC).
Is Wells Fargo & Company (NYSE:WFC) a bargain? The best stock pickers were taking a bearish view. The number of bullish hedge fund bets fell by 3 lately. Wells Fargo & Company (NYSE:WFC) was in 96 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 104. Our calculations also showed that WFC ranked #25 among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Dmitry Balyasny of Balyasny Asset Management
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Do Hedge Funds Think WFC Is A Good Stock To Buy Now?
At the end of March, a total of 96 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the previous quarter. By comparison, 76 hedge funds held shares or bullish call options in WFC a year ago. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
Among these funds, Eagle Capital Management held the most valuable stake in Wells Fargo & Company (NYSE:WFC), which was worth $1680 million at the end of the fourth quarter. On the second spot was Pzena Investment Management which amassed $788.3 million worth of shares. Theleme Partners, D E Shaw, and Citadel Investment Group 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 Theleme Partners allocated the biggest weight to Wells Fargo & Company (NYSE:WFC), around 25.66% of its 13F portfolio. Magnolia Capital Fund is also relatively very bullish on the stock, setting aside 20.64 percent of its 13F equity portfolio to WFC.
Judging by the fact that Wells Fargo & Company (NYSE:WFC) has faced a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there was a specific group of fund managers that elected to cut their positions entirely last quarter. At the top of the heap, Snehal Amin’s Windacre Partnership dumped the biggest stake of the 750 funds monitored by Insider Monkey, comprising close to $369.5 million in stock, and John Overdeck and David Siegel’s Two Sigma Advisors was right behind this move, as the fund sold off about $278.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Wells Fargo & Company (NYSE:WFC) but similarly valued. These stocks are Danaher Corporation (NYSE:DHR), Medtronic plc (NYSE:MDT), Novo Nordisk A/S (NYSE:NVO), Costco Wholesale Corporation (NASDAQ:COST), T-Mobile US, Inc. (NYSE:TMUS), Citigroup Inc. (NYSE:C), and Royal Dutch Shell plc (NYSE:RDS). This group of stocks’ market values resemble WFC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DHR | 81 | 5796963 | 0 |
| MDT | 65 | 3627546 | 6 |
| NVO | 23 | 2929727 | 0 |
| COST | 56 | 4014769 | -5 |
| TMUS | 98 | 9055738 | -5 |
| C | 90 | 6938143 | -5 |
| RDS | 36 | 2190186 | 2 |
| Average | 64.1 | 4936153 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 64.1 hedge funds with bullish positions and the average amount invested in these stocks was $4936 million. That figure was $7455 million in WFC’s case. T-Mobile US, Inc. (NYSE:TMUS) is the most popular stock in this table. On the other hand Novo Nordisk A/S (NYSE:NVO) is the least popular one with only 23 bullish hedge fund positions. Wells Fargo & Company (NYSE:WFC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WFC is 78.4. 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 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 25.8% in 2021 through August 6th and still beat the market by 6.7 percentage points. Hedge funds were also right about betting on WFC as the stock returned 25.6% since the end of Q1 (through 8/6) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Wells Fargo & Company (NYSE:WFC)
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Disclosure: None. This article was originally published at Insider Monkey.
