The worries about the economic slowdown in China and the ongoing uncertainty about the path of interest-rate increases triggered several waves of equity sell-offs during the third quarter. Of course, most hedge funds and other asset managers had to stomach substantial losses during the bloody three-month period, which might have caused some to consider fleeing the U.S. equity markets. Interestingly, smaller-cap stocks registered higher losses than large-capitalization stocks during the September quarter, suggesting that institutional investors heavily discarded seemingly riskier equities amid high uncertainty and turmoil. In fact, the Russell 2000 Index lost 11.9% in the third quarter, while the Standard and Poor’s 500 benchmark declined a mere 6.4%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Zions Bancorporation (NASDAQ:ZION).
Zions Bancorporation (NASDAQ:ZION) shareholders have witnessed a decrease in hedge fund sentiment recently. At the end of this article we will also compare ZION to other stocks including CoStar Group Inc (NASDAQ:CSGP), Grupo Aeroportuario del Pacifico (ADR) (NYSE:PAC), and RPM International Inc. (NYSE:RPM) to get a better sense of its popularity.
To most stock holders, hedge funds are viewed as unimportant, old investment tools of yesteryear. While there are over an 8000 funds trading at present, Our researchers look at the bigwigs of this group, approximately 700 funds. It is estimated that this group of investors orchestrate most of the smart money’s total capital, and by following their best equity investments, Insider Monkey has spotted many investment strategies that have historically outpaced Mr. Market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points per year for a decade in their back tests.
Keeping this in mind, let’s take a look at the latest action surrounding Zions Bancorporation (NASDAQ:ZION).
What does the smart money think about Zions Bancorporation (NASDAQ:ZION)?
At the end of the third quarter, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Ken Griffin’s Citadel Investment Group has the biggest position in Zions Bancorporation (NASDAQ:ZION), worth close to $109.8 million, corresponding to 0.1% of its total 13F portfolio. Coming in second is Third Avenue Management, led by Martin Whitman, holding a $80.8 million position; the fund has 2.2% of its 13F portfolio invested in the stock. Remaining members of the smart money that are bullish contain Israel Englander’s Millennium Management, Curtis Macnguyen’s Ivory Capital (Investment Mgmt) and Jim Simons’s Renaissance Technologies.
Since Zions Bancorporation (NASDAQ:ZION) has faced declining sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of hedge funds that elected to cut their positions entirely in the third quarter. Intriguingly, Neil Chriss’s Hutchin Hill Capital dropped the biggest position of all the hedgies followed by Insider Monkey, totaling an estimated $32.5 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund said goodbye to about $22.4 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 4 funds in the third quarter.
Let’s now review hedge fund activity in other stocks similar to Zions Bancorporation (NASDAQ:ZION). We will take a look at CoStar Group Inc (NASDAQ:CSGP), Grupo Aeroportuario del Pacifico (ADR) (NYSE:PAC), RPM International Inc. (NYSE:RPM), and Jack Henry & Associates, Inc. (NASDAQ:JKHY). This group of stocks’ market values match ZION’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 14.5 hedge funds with bullish positions and the average amount invested in these stocks was $103 million. That figure was $551 million in ZION’s case. CoStar Group Inc (NASDAQ:CSGP) is the most popular stock in this table. On the other hand Grupo Aeroportuario del Pacifico (ADR) (NYSE:PAC) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Zions Bancorporation (NASDAQ:ZION) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.