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 Anheuser-Busch InBev SA/NV (NYSE:BUD).
Anheuser-Busch InBev SA/NV (NYSE:BUD) was in 17 hedge funds' portfolios at the end of March. BUD investors should pay attention to a decrease in enthusiasm from smart money of late. There were 23 hedge funds in our database with BUD holdings at the end of the previous quarter. Our calculations also showed that BUD 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.
According to most investors, hedge funds are assumed to be worthless, outdated financial vehicles of yesteryear. While there are greater than 8000 funds in operation at the moment, Our experts look at the upper echelon of this club, around 850 funds. It is estimated that this group of investors control the majority of all hedge funds' total asset base, and by monitoring their inimitable investments, Insider Monkey has identified various investment strategies that have historically exceeded Mr. Market. Insider Monkey's flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year 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_844243" align="aligncenter" width="392"] Donald Sussman of Paloma Partners[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. 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 the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's take a glance at the fresh hedge fund action encompassing Anheuser-Busch InBev SA/NV (NYSE:BUD).
How have hedgies been trading Anheuser-Busch InBev SA/NV (NYSE:BUD)?
Heading into the second quarter of 2020, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -26% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards BUD over the last 18 quarters. With hedge funds' sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Tom Russo's Gardner Russo & Gardner has the biggest position in Anheuser-Busch InBev SA/NV (NYSE:BUD), worth close to $350.3 million, corresponding to 3.5% of its total 13F portfolio. The second most bullish fund manager is Fisher Asset Management, led by Ken Fisher, holding a $311 million position; 0.4% of its 13F portfolio is allocated to the stock. Remaining members of the smart money that hold long positions include Renaissance Technologies, D. E. Shaw's D E Shaw and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Gardner Russo & Gardner allocated the biggest weight to Anheuser-Busch InBev SA/NV (NYSE:BUD), around 3.54% of its 13F portfolio. Beddow Capital Management is also relatively very bullish on the stock, dishing out 3.03 percent of its 13F equity portfolio to BUD.
Because Anheuser-Busch InBev SA/NV (NYSE:BUD) has witnessed declining sentiment from hedge fund managers, logic holds that there exists a select few fund managers who were dropping their full holdings by the end of the first quarter. Intriguingly, Shane Finemore's Manikay Partners dropped the biggest investment of all the hedgies watched by Insider Monkey, comprising an estimated $44.3 million in stock. Robert Pitts's fund, Steadfast Capital Management, also dumped its stock, about $6.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 6 funds by the end of the first quarter.
Let's now take a look at hedge fund activity in other stocks similar to Anheuser-Busch InBev SA/NV (NYSE:BUD). We will take a look at The Boeing Company (NYSE:BA), BP plc (NYSE:BP), Raytheon Technologies Corporation (NYSE:UTX), and United Parcel Service, Inc. (NYSE:UPS). All of these stocks' market caps match BUD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position BA,54,877378,-28 BP,31,877653,-9 UTX,62,4025728,-19 UPS,48,842540,6 Average,48.75,1655825,-12.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 48.75 hedge funds with bullish positions and the average amount invested in these stocks was $1656 million. That figure was $877 million in BUD's case. Raytheon Technologies Corporation (NYSE:UTX) is the most popular stock in this table. On the other hand BP plc (NYSE:BP) is the least popular one with only 31 bullish hedge fund positions. Compared to these stocks Anheuser-Busch InBev SA/NV (NYSE:BUD) is even less popular than BP. Hedge funds dodged a bullet by taking a bearish stance towards BUD. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but managed to beat the market by 15.9 percentage points. Unfortunately BUD wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); BUD investors were disappointed as the stock returned 16.4% during the second quarter (through June 22nd) 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 most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.