At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Becton, Dickinson and Company (NYSE:BDX).
Becton, Dickinson and Company (NYSE:BDX) shareholders have witnessed an increase in activity from the world's largest hedge funds in recent months. Our calculations also showed that BDX isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
If you'd ask most shareholders, hedge funds are perceived as slow, outdated investment tools of the past. While there are more than 8000 funds in operation at the moment, We choose to focus on the bigwigs of this club, about 850 funds. Most estimates calculate that this group of people command bulk of the smart money's total capital, and by monitoring their inimitable investments, Insider Monkey has deciphered many investment strategies that have historically beaten 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 March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_256989" align="aligncenter" width="400"] Dmitry Balyasny of Balyasny Asset Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this analyst’s “corona catalyst plays“. We interview hedge fund managers and ask them about best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let's take a look at the latest hedge fund action surrounding Becton, Dickinson and Company (NYSE:BDX).
Hedge fund activity in Becton, Dickinson and Company (NYSE:BDX)
At Q1's end, a total of 56 of the hedge funds tracked by Insider Monkey were long this stock, a change of 12% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards BDX over the last 18 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Generation Investment Management held the most valuable stake in Becton, Dickinson and Company (NYSE:BDX), which was worth $394.1 million at the end of the third quarter. On the second spot was Cantillon Capital Management which amassed $276.6 million worth of shares. Intermede Investment Partners, Balyasny Asset Management, and Partner Fund Management 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 Intermede Investment Partners allocated the biggest weight to Becton, Dickinson and Company (NYSE:BDX), around 5.08% of its 13F portfolio. Grisanti Brown & Partners is also relatively very bullish on the stock, setting aside 4.78 percent of its 13F equity portfolio to BDX.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Partner Fund Management, managed by Christopher James, established the biggest position in Becton, Dickinson and Company (NYSE:BDX). Partner Fund Management had $34.7 million invested in the company at the end of the quarter. Brandon Haley's Holocene Advisors also initiated a $28.1 million position during the quarter. The other funds with brand new BDX positions are Andrew Sandler's Sandler Capital Management, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, and Franklin Parlamis's Aequim Alternative Investments.
Let's now take a look at hedge fund activity in other stocks similar to Becton, Dickinson and Company (NYSE:BDX). We will take a look at CME Group Inc (NASDAQ:CME), Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), Dominion Energy Inc. (NYSE:D), and Crown Castle International Corp. (NYSE:CCI). This group of stocks' market valuations match BDX's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CME,62,2265510,8 VRTX,56,3313662,3 D,34,371177,-3 CCI,40,1640829,2 Average,48,1897795,2.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 48 hedge funds with bullish positions and the average amount invested in these stocks was $1898 million. That figure was $1267 million in BDX's case. CME Group Inc (NASDAQ:CME) is the most popular stock in this table. On the other hand Dominion Energy Inc. (NYSE:D) is the least popular one with only 34 bullish hedge fund positions. Becton, Dickinson and Company (NYSE:BDX) 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd but beat the market by 15.6 percentage points. Unfortunately BDX wasn't nearly as popular as these 10 stocks and hedge funds that were betting on BDX were disappointed as the stock returned 4.1% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 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.