The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. What do these smart investors think about JPMorgan Chase & Co. (NYSE:JPM)?
Is JPMorgan Chase & Co. (NYSE:JPM) worth your attention right now? The smart money was becoming less hopeful. The number of bullish hedge fund positions shrunk by 5 lately. JPMorgan Chase & Co. (NYSE:JPM) was in 118 hedge funds’ portfolios at the end of September. The all time high for this statistics is 123. Our calculations also showed that JPM ranks 12th 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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 take a glance at the key hedge fund action regarding JPMorgan Chase & Co. (NYSE:JPM).
How have hedgies been trading JPMorgan Chase & Co. (NYSE:JPM)?
At the end of the third quarter, a total of 118 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from one quarter earlier. By comparison, 94 hedge funds held shares or bullish call options in JPM a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Andreas Halvorsen’s Viking Global has the biggest position in JPMorgan Chase & Co. (NYSE:JPM), worth close to $909.8 million, amounting to 3.3% of its total 13F portfolio. The second most bullish fund manager is D1 Capital Partners, led by Daniel Sundheim, holding a $729.4 million position; the fund has 4.3% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions contain Ken Fisher’s Fisher Asset Management, Tom Russo’s Gardner Russo & Gardner and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Brave Warrior Capital allocated the biggest weight to JPMorgan Chase & Co. (NYSE:JPM), around 9.65% of its 13F portfolio. EJF Capital is also relatively very bullish on the stock, setting aside 7.42 percent of its 13F equity portfolio to JPM.
Since JPMorgan Chase & Co. (NYSE:JPM) has faced falling interest from the entirety of the hedge funds we track, it’s safe to say that there were a few money managers that elected to cut their full holdings last quarter. It’s worth mentioning that Renaissance Technologies sold off the largest position of the 750 funds followed by Insider Monkey, valued at about $207.4 million in stock. Dmitry Balyasny’s fund, Balyasny Asset Management, also sold off its stock, about $133 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 5 funds last quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as JPMorgan Chase & Co. (NYSE:JPM) but similarly valued. We will take a look at Verizon Communications Inc. (NYSE:VZ), Adobe Inc. (NASDAQ:ADBE), Paypal Holdings Inc (NASDAQ:PYPL), salesforce.com, inc. (NYSE:CRM), The Walt Disney Company (NYSE:DIS), Netflix, Inc. (NASDAQ:NFLX), and Intel Corporation (NASDAQ:INTC). This group of stocks’ market caps are similar to JPM’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 101.3 hedge funds with bullish positions and the average amount invested in these stocks was $8862 million. That figure was $6058 million in JPM’s case. Paypal Holdings Inc (NASDAQ:PYPL) is the most popular stock in this table. On the other hand Verizon Communications Inc. (NYSE:VZ) is the least popular one with only 65 bullish hedge fund positions. JPMorgan Chase & Co. (NYSE:JPM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for JPM is 79. 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 gained 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. Hedge funds were also right about betting on JPM as the stock returned 23.6% since the end of Q3 (through 11/23) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.