The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Zions Bancorporation, National Association (NASDAQ:ZION) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Is Zions Bancorporation, National Association (NASDAQ:ZION) a superb investment today? Prominent investors were in a bearish mood. The number of long hedge fund bets were cut by 9 recently. Zions Bancorporation, National Association (NASDAQ:ZION) was in 24 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 45. Our calculations also showed that ZION isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 33 hedge funds in our database with ZION holdings at the end of March.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 56 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Steven Cohen of Point72 Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. 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 to get excerpts of these letters in your inbox. Keeping this in mind let’s check out the recent hedge fund action surrounding Zions Bancorporation, National Association (NASDAQ:ZION).
How have hedgies been trading Zions Bancorporation, National Association (NASDAQ:ZION)?
Heading into the third quarter of 2020, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -27% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ZION over the last 20 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Zions Bancorporation, National Association (NASDAQ:ZION) was held by Citadel Investment Group, which reported holding $9.7 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $9.3 million position. Other investors bullish on the company included Arrowstreet Capital, Elizabeth Park Capital Management, and Adage Capital Management. In terms of the portfolio weights assigned to each position Elizabeth Park Capital Management allocated the biggest weight to Zions Bancorporation, National Association (NASDAQ:ZION), around 4.17% of its 13F portfolio. Forest Hill Capital is also relatively very bullish on the stock, dishing out 2.41 percent of its 13F equity portfolio to ZION.
Seeing as Zions Bancorporation, National Association (NASDAQ:ZION) has experienced falling interest from the aggregate hedge fund industry, logic holds that there was a specific group of money managers that elected to cut their full holdings last quarter. Interestingly, Renaissance Technologies sold off the biggest stake of the “upper crust” of funds tracked by Insider Monkey, totaling close to $14.3 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund sold off about $11.8 million worth. These moves are important to note, as aggregate hedge fund interest fell by 9 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Zions Bancorporation, National Association (NASDAQ:ZION) but similarly valued. We will take a look at Ingredion Incorporated (NYSE:INGR), Kimco Realty Corp (NYSE:KIM), Teck Resources Ltd (NYSE:TECK), SolarWinds Corporation (NYSE:SWI), Casey’s General Stores, Inc. (NASDAQ:CASY), LHC Group, Inc. (NASDAQ:LHCG), and Prosperity Bancshares, Inc. (NYSE:PB). This group of stocks’ market caps match ZION’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INGR | 22 | 226529 | 4 |
| KIM | 28 | 171160 | 6 |
| TECK | 25 | 329603 | 1 |
| SWI | 19 | 2364868 | 5 |
| CASY | 23 | 152316 | 0 |
| LHCG | 30 | 159342 | 3 |
| PB | 27 | 109165 | 11 |
| Average | 24.9 | 501855 | 4.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.9 hedge funds with bullish positions and the average amount invested in these stocks was $502 million. That figure was $66 million in ZION’s case. LHC Group, Inc. (NASDAQ:LHCG) is the most popular stock in this table. On the other hand SolarWinds Corporation (NYSE:SWI) is the least popular one with only 19 bullish hedge fund positions. Zions Bancorporation, National Association (NASDAQ:ZION) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ZION is 34.7. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 21.3% in 2020 through September 25th and surpassed the market by 17.7 percentage points. Unfortunately ZION wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); ZION investors were disappointed as the stock returned -15.5% since Q2 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
Follow Zions Bancorporation National Association (NASDAQ:ZION)
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Disclosure: None. This article was originally published at Insider Monkey.
