A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Abbott Laboratories (NYSE:ABT).
Is Abbott Laboratories (NYSE:ABT) the right pick for your portfolio? The smart money is in an optimistic mood. The number of bullish hedge fund bets moved up by 11 in recent months. Our calculations also showed that ABT isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). ABT was in 58 hedge funds' portfolios at the end of September. There were 47 hedge funds in our database with ABT holdings at the end of the previous quarter. Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most stock holders, hedge funds are seen as slow, old investment vehicles of years past. While there are over 8000 funds in operation at present, We choose to focus on the upper echelon of this group, approximately 750 funds. It is estimated that this group of investors shepherd the majority of all hedge funds' total capital, and by watching their matchless investments, Insider Monkey has come up with a few investment strategies that have historically exceeded the S&P 500 index. Insider Monkey's flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points annually since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_340081" align="aligncenter" width="450"] Phill Gross of Adage Capital Management[/caption]
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. Let's check out the fresh hedge fund action encompassing Abbott Laboratories (NYSE:ABT).
Hedge fund activity in Abbott Laboratories (NYSE:ABT)
Heading into the fourth quarter of 2019, a total of 58 of the hedge funds tracked by Insider Monkey were long this stock, a change of 23% from the previous quarter. On the other hand, there were a total of 53 hedge funds with a bullish position in ABT a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
The largest stake in Abbott Laboratories (NYSE:ABT) was held by GQG Partners, which reported holding $577.5 million worth of stock at the end of September. It was followed by Diamond Hill Capital with a $536.5 million position. Other investors bullish on the company included Adage Capital Management, AQR Capital Management, and Sirios Capital Management. In terms of the portfolio weights assigned to each position GQG Partners allocated the biggest weight to Abbott Laboratories (NYSE:ABT), around 5.87% of its portfolio. Sirios Capital Management is also relatively very bullish on the stock, designating 5.39 percent of its 13F equity portfolio to ABT.
As one would reasonably expect, specific money managers were leading the bulls' herd. Millennium Management, managed by Israel Englander, assembled the largest position in Abbott Laboratories (NYSE:ABT). Millennium Management had $23 million invested in the company at the end of the quarter. Kris Jenner, Gordon Bussard, Graham McPhail's Rock Springs Capital Management also made a $10.3 million investment in the stock during the quarter. The following funds were also among the new ABT investors: Benjamin A. Smith's Laurion Capital Management, Matthew Tewksbury's Stevens Capital Management, and Lee Ainslie's Maverick Capital.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Abbott Laboratories (NYSE:ABT) but similarly valued. We will take a look at NIKE, Inc. (NYSE:NKE), Medtronic plc (NYSE:MDT), SAP SE (NYSE:SAP), and TOTAL S.A. (NYSE:TOT). This group of stocks' market values are similar to ABT's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position NKE,63,2304473,12 MDT,50,2120499,1 SAP,18,1578895,1 TOT,17,1094583,4 Average,37,1774613,4.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 37 hedge funds with bullish positions and the average amount invested in these stocks was $1775 million. That figure was $2063 million in ABT's case. NIKE, Inc. (NYSE:NKE) is the most popular stock in this table. On the other hand TOTAL S.A. (NYSE:TOT) is the least popular one with only 17 bullish hedge fund positions. Abbott Laboratories (NYSE:ABT) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately ABT wasn't nearly as popular as these 20 stocks and hedge funds that were betting on ABT were disappointed as the stock returned 2.5% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.