Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the third quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of First Republic Bank (NYSE:FRC) based on that data.
First Republic Bank (NYSE:FRC) was in 35 hedge funds' portfolios at the end of September. The all time high for this statistic is 41. FRC shareholders have witnessed an increase in activity from the world's largest hedge funds recently. There were 34 hedge funds in our database with FRC positions at the end of the second quarter. Our calculations also showed that FRC isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).
David E. Shaw of D.E. Shaw
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind let's review the fresh hedge fund action encompassing First Republic Bank (NYSE:FRC).
Do Hedge Funds Think FRC Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the second quarter of 2021. By comparison, 31 hedge funds held shares or bullish call options in FRC a year ago. With hedgies' sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Among these funds, Select Equity Group held the most valuable stake in First Republic Bank (NYSE:FRC), which was worth $538.2 million at the end of the third quarter. On the second spot was Junto Capital Management which amassed $52.2 million worth of shares. Millennium Management, Osterweis Capital Management, and D E Shaw 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 Osterweis Capital Management allocated the biggest weight to First Republic Bank (NYSE:FRC), around 1.91% of its 13F portfolio. Select Equity Group is also relatively very bullish on the stock, setting aside 1.81 percent of its 13F equity portfolio to FRC.
Consequently, key money managers were breaking ground themselves. Junto Capital Management, managed by James Parsons, created the biggest position in First Republic Bank (NYSE:FRC). Junto Capital Management had $52.2 million invested in the company at the end of the quarter. Ryan Tolkin (CIO)'s Schonfeld Strategic Advisors also initiated a $20.2 million position during the quarter. The other funds with brand new FRC positions are Dmitry Balyasny's Balyasny Asset Management, Paul Marshall and Ian Wace's Marshall Wace LLP, and Jinghua Yan's TwinBeech Capital.
Let's check out hedge fund activity in other stocks similar to First Republic Bank (NYSE:FRC). These stocks are International Flavors & Fragrances Inc (NYSE:IFF), CoStar Group Inc (NASDAQ:CSGP), PPG Industries, Inc. (NYSE:PPG), BeiGene, Ltd. (NASDAQ:BGNE), Xcel Energy Inc (NYSE:XEL), The Trade Desk, Inc. (NASDAQ:TTD), and Archer Daniels Midland Company (NYSE:ADM). This group of stocks' market valuations are similar to FRC's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position IFF,46,2838241,-6 CSGP,29,2585035,-20 PPG,30,318414,4 BGNE,16,6418381,-5 XEL,26,498007,4 TTD,19,499103,-6 ADM,27,351486,-14 Average,27.6,1929810,-6.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.6 hedge funds with bullish positions and the average amount invested in these stocks was $1930 million. That figure was $918 million in FRC's case. International Flavors & Fragrances Inc (NYSE:IFF) is the most popular stock in this table. On the other hand BeiGene, Ltd. (NASDAQ:BGNE) is the least popular one with only 16 bullish hedge fund positions. First Republic Bank (NYSE:FRC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for FRC is 63.3. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on FRC as the stock returned 8.8% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.