In this article you are going to find out whether hedge funds think Invesco Ltd. (NYSE:IVZ) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is IVZ a good stock to buy? Invesco Ltd. (NYSE:IVZ) has experienced a decrease in enthusiasm from smart money recently. Invesco Ltd. (NYSE:IVZ) was in 38 hedge funds' portfolios at the end of September. The all time high for this statistic is 40. Our calculations also showed that IVZ isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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. Now let's view the key hedge fund action surrounding Invesco Ltd. (NYSE:IVZ).
Nelson Peltz of Trian Partners
Do Hedge Funds Think IVZ Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 38 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards IVZ over the last 25 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
Among these funds, Trian Partners held the most valuable stake in Invesco Ltd. (NYSE:IVZ), which was worth $955.7 million at the end of the third quarter. On the second spot was Pzena Investment Management which amassed $64.9 million worth of shares. Two Sigma Advisors, Millennium 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 Trian Partners allocated the biggest weight to Invesco Ltd. (NYSE:IVZ), around 11.88% of its 13F portfolio. Full18 Capital is also relatively very bullish on the stock, dishing out 2.67 percent of its 13F equity portfolio to IVZ.
Judging by the fact that Invesco Ltd. (NYSE:IVZ) has witnessed falling interest from the aggregate hedge fund industry, logic holds that there exists a select few hedge funds that decided to sell off their entire stakes last quarter. Interestingly, Steve Cohen's Point72 Asset Management sold off the largest investment of all the hedgies tracked by Insider Monkey, comprising an estimated $7.4 million in stock, and Sander Gerber's Hudson Bay Capital Management was right behind this move, as the fund sold off about $5.3 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 2 funds last quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Invesco Ltd. (NYSE:IVZ) but similarly valued. We will take a look at Kirkland Lake Gold Ltd. (NYSE:KL), Wix.Com Ltd (NASDAQ:WIX), ironSource Ltd. (NYSE:IS), East West Bancorp, Inc. (NASDAQ:EWBC), Cable One Inc (NYSE:CABO), Lennox International Inc. (NYSE:LII), and Formula One Group (NASDAQ:FWONA). This group of stocks' market values resemble IVZ's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KL,21,480649,-1 WIX,25,740850,-10 IS,29,726683,-3 EWBC,29,526433,5 CABO,26,585271,6 LII,26,492417,0 FWONA,18,257601,-4 Average,24.9,544272,-1 [/table]
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 $544 million. That figure was $1355 million in IVZ's case. ironSource Ltd. (NYSE:IS) is the most popular stock in this table. On the other hand Formula One Group (NASDAQ:FWONA) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Invesco Ltd. (NYSE:IVZ) is more popular among hedge funds. Our overall hedge fund sentiment score for IVZ is 81.5. 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. Unfortunately IVZ wasn't nearly as popular as these 5 stocks and hedge funds that were betting on IVZ were disappointed as the stock returned -6.8% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.