In this article we will take a look at whether hedge funds think Fiserv, Inc. (NASDAQ:FISV) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Fiserv, Inc. (NASDAQ:FISV) a buy right now? The smart money was buying. The number of bullish hedge fund positions improved by 5 in recent months. Fiserv, Inc. (NASDAQ:FISV) was in 90 hedge funds’ portfolios at the end of September. The all time high for this statistics is 85. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that FISV ranked 25th among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 85 hedge funds in our database with FISV positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are a multitude of metrics investors put to use to evaluate publicly traded companies. A couple of the best metrics are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the top fund managers can outclass the S&P 500 by a superb margin (see the details here).
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets. Tesla’s stock price skyrocketed, yet lithium prices are still below their 2019 highs. So, we are checking out this lithium stock right now. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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. Keeping this in mind we’re going to analyze the recent hedge fund action regarding Fiserv, Inc. (NASDAQ:FISV).
How have hedgies been trading Fiserv, Inc. (NASDAQ:FISV)?
At the end of September, a total of 90 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from the second quarter of 2020. On the other hand, there were a total of 80 hedge funds with a bullish position in FISV a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Fiserv, Inc. (NASDAQ:FISV) was held by Melvin Capital Management, which reported holding $1086.6 million worth of stock at the end of September. It was followed by Melvin Capital Management with a $645.1 million position. Other investors bullish on the company included BlueSpruce Investments, Holocene Advisors, and Kensico Capital. In terms of the portfolio weights assigned to each position Toscafund Asset Management allocated the biggest weight to Fiserv, Inc. (NASDAQ:FISV), around 22.06% of its 13F portfolio. BlueSpruce Investments is also relatively very bullish on the stock, setting aside 11.36 percent of its 13F equity portfolio to FISV.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Soroban Capital Partners, managed by Eric W. Mandelblatt and Gaurav Kapadia, assembled the largest position in Fiserv, Inc. (NASDAQ:FISV). Soroban Capital Partners had $172.6 million invested in the company at the end of the quarter. Ricky Sandler’s Eminence Capital also made a $164.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Aaron Cowen’s Suvretta Capital Management, Gavin Baker’s Atreides Management, and Michael A. Price and Amos Meron’s Empyrean Capital Partners.
Let’s go over hedge fund activity in other stocks similar to Fiserv, Inc. (NASDAQ:FISV). We will take a look at Anthem Inc (NYSE:ANTM), Becton, Dickinson and Company (NYSE:BDX), Equinix, Inc. (REIT) (NASDAQ:EQIX), The TJX Companies, Inc. (NYSE:TJX), Dominion Energy Inc. (NYSE:D), Colgate-Palmolive Company (NYSE:CL), and FedEx Corporation (NYSE:FDX). This group of stocks’ market values resemble FISV’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 57.4 hedge funds with bullish positions and the average amount invested in these stocks was $2379 million. That figure was $5404 million in FISV’s case. The TJX Companies, Inc. (NYSE:TJX) is the most popular stock in this table. On the other hand Dominion Energy Inc. (NYSE:D) is the least popular one with only 37 bullish hedge fund positions. Compared to these stocks Fiserv, Inc. (NASDAQ:FISV) is more popular among hedge funds. Our overall hedge fund sentiment score for FISV is 90. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks returned 28.1% in 2020 through November 23rd but still managed to beat the market by 15.4 percentage points. Hedge funds were also right about betting on FISV as the stock returned 8.8% since the end of September (through 11/23) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
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Disclosure: None. This article was originally published at Insider Monkey.