Were Hedge Funds Right About Citigroup (C)?
After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of December 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Citigroup Inc. (NYSE:C).
Is Citigroup Inc. (NYSE:C) the right investment to pursue these days? The best stock pickers were getting more bullish. The number of bullish hedge fund positions moved up by 4 recently. Citigroup Inc. (NYSE:C) was in 95 hedge funds' portfolios at the end of December. The all time high for this statistic is 121. Our calculations also showed that C ranked #26 among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 91 hedge funds in our database with C positions at the end of the third quarter.
Richard S. Pzena of Pzena Investment Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 look at the fresh hedge fund action regarding Citigroup Inc. (NYSE:C).
Do Hedge Funds Think C Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 95 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards C over the last 22 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey's hedge fund database, ValueAct Capital, managed by Jeffrey Ubben, holds the biggest position in Citigroup Inc. (NYSE:C). ValueAct Capital has a $1.6664 billion position in the stock, comprising 19.3% of its 13F portfolio. On ValueAct Capital's heels is Boykin Curry of Eagle Capital Management, with a $1.3852 billion position; the fund has 4.4% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism comprise Richard S. Pzena's Pzena Investment Management, D. E. Shaw's D E Shaw and Robert Rodriguez and Steven Romick's First Pacific Advisors LLC. In terms of the portfolio weights assigned to each position ValueAct Capital allocated the biggest weight to Citigroup Inc. (NYSE:C), around 19.33% of its 13F portfolio. Kahn Brothers is also relatively very bullish on the stock, setting aside 8.78 percent of its 13F equity portfolio to C.
As one would reasonably expect, specific money managers have been driving this bullishness. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, initiated the most valuable position in Citigroup Inc. (NYSE:C). Senator Investment Group had $95.6 million invested in the company at the end of the quarter. Jeffrey Altman's Owl Creek Asset Management also made a $87.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Steve Cohen's Point72 Asset Management, and Zach Schreiber's Point State Capital.
Let's now take a look at hedge fund activity in other stocks similar to Citigroup Inc. (NYSE:C). We will take a look at Starbucks Corporation (NASDAQ:SBUX), Sony Corporation (NYSE:SNE), Wells Fargo & Company (NYSE:WFC), Morgan Stanley (NYSE:MS), Sanofi (NYSE:SNY), The Boeing Company (NYSE:BA), and Lowe's Companies, Inc. (NYSE:LOW). This group of stocks' market caps are closest to C's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SBUX,67,4990840,1 SNE,28,593971,2 WFC,99,8748819,9 MS,66,5665191,-4 SNY,15,1145189,-5 BA,55,1057323,12 LOW,71,5192115,-12 Average,57.3,3913350,0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 57.3 hedge funds with bullish positions and the average amount invested in these stocks was $3913 million. That figure was $7120 million in C's case. Wells Fargo & Company (NYSE:WFC) is the most popular stock in this table. On the other hand Sanofi (NYSE:SNY) is the least popular one with only 15 bullish hedge fund positions. Citigroup Inc. (NYSE:C) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for C is 80.2. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Hedge funds were also right about betting on C as the stock returned 18% since the end of Q4 (through 4/19) 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.
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