Disney, Salesforce, and 3 Other Stocks the Smart Money Bought Up

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Investors following the proverbial “smart money” have a gold mine of data, thanks to hedge funds’ second-quarter regulatory filings.

The 13F filings require funds to disclose their positions in U.S.-traded equities as of the close of each quarter. Investors can use the data to generate investment ideas—with caveats. Funds have 45 days after the close of the quarter to file, so positions may be out of date. Also, a stock holding may be just a hedge rather than true conviction. Exercisable put and call options are disclosed, but not strike prices or expirations, limiting the usefulness.

That said, aggregating data among value-oriented funds—as opposed to using data from one fund—can show where Wall Street sees opportunities. Chris Senyek, chief investment strategist of Wolfe Research did that and found five intriguing stocks broadly held by funds:

Walt Disney

(ticker: DIS) just saw Dan Loeb’s Third Point unveil a new stake last week, and it could be a play on cost-cutting and share repurchases, Senyek wrote.

Fiserv

(FISV) has been a target of ValueAct, which currently holds a board seat. The payments firm is benefiting from inflation, thanks to higher volumes.

LPL Financial

(LPLA), meanwhile, is a bet on rising interest rates, as earnings are expected to rise by roughly 50% for every 100 basis-point hike in rates.

Perimeter Solutions

(PRM), which makes firefighting products, is expected to grow earnings by 71% next year, according to Senyek.

Finally, hedge fund favorite

Salesforce

(CRM) is trading at 39 times 2023 earnings, which is below its five-year average.

Write to Carleton English at [email protected]