Truist Financial Corporation (TFC): Are Hedge Funds Right About This Stock?

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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 second 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 Truist Financial Corporation (NYSE:TFC) based on that data.

Is Truist Financial Corporation (NYSE:TFC) worth your attention right now? Money managers were in an optimistic mood. The number of bullish hedge fund positions increased by 3 in recent months. Truist Financial Corporation (NYSE:TFC) was in 39 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 45. Our calculations also showed that TFC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 36 hedge funds in our database with TFC holdings at the end of March.

In the 21st century investor’s toolkit there are a large number of indicators stock traders can use to value their stock investments. A pair of the less utilized indicators are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the top hedge fund managers can trounce the market by a superb amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

Dmitry Balyasny of Balyasny Asset Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. 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. 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 homepage. Keeping this in mind we’re going to go over the new hedge fund action regarding Truist Financial Corporation (NYSE:TFC).

Do Hedge Funds Think TFC Is A Good Stock To Buy Now?

At second quarter’s end, a total of 39 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from the previous quarter. On the other hand, there were a total of 33 hedge funds with a bullish position in TFC a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Diamond Hill Capital was the largest shareholder of Truist Financial Corporation (NYSE:TFC), with a stake worth $435.3 million reported as of the end of June. Trailing Diamond Hill Capital was Balyasny Asset Management, which amassed a stake valued at $111.1 million. Millennium Management, D E Shaw, and Renaissance Technologies 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 Soapstone Capital allocated the biggest weight to Truist Financial Corporation (NYSE:TFC), around 6.68% of its 13F portfolio. Prana Capital Management is also relatively very bullish on the stock, dishing out 1.7 percent of its 13F equity portfolio to TFC.

As industrywide interest jumped, key hedge funds were breaking ground themselves. Balyasny Asset Management, managed by Dmitry Balyasny, created the most valuable position in Truist Financial Corporation (NYSE:TFC). Balyasny Asset Management had $111.1 million invested in the company at the end of the quarter. Paul Reeder and Edward Shapiro’s PAR Capital Management also made a $27.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Seuss’s Prana Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management, and Karim Abbadi and Edward McBride’s Centiva Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Truist Financial Corporation (NYSE:TFC) but similarly valued. We will take a look at Activision Blizzard, Inc. (NASDAQ:ATVI), CSX Corporation (NASDAQ:CSX), The Sherwin-Williams Company (NYSE:SHW), Coupang, Inc. (NYSE:CPNG), Equinix, Inc. (REIT) (NASDAQ:EQIX), Snowflake Inc (NYSE:SNOW), and Marsh & McLennan Companies, Inc. (NYSE:MMC). This group of stocks’ market values are closest to TFC’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ATVI 78 3651606 2
CSX 56 4223857 3
SHW 49 2028984 -2
CPNG 33 18042813 -7
EQIX 33 1266516 -8
SNOW 70 12507692 -1
MMC 41 2537494 4
Average 51.4 6322709 -1.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 51.4 hedge funds with bullish positions and the average amount invested in these stocks was $6323 million. That figure was $1019 million in TFC’s case. Activision Blizzard, Inc. (NASDAQ:ATVI) is the most popular stock in this table. On the other hand Coupang, Inc. (NYSE:CPNG) is the least popular one with only 33 bullish hedge fund positions. Truist Financial Corporation (NYSE:TFC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TFC is 40.7. 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. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. A small number of hedge funds were also right about betting on TFC as the stock returned 9.4% since the end of the second quarter (through 10/11) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.