With the first-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the second quarter. One of these stocks was Church & Dwight Co., Inc. (NYSE:CHD).
Is Church & Dwight Co., Inc. (NYSE:CHD) a buy right now? The smart money is getting more optimistic. The number of long hedge fund bets moved up by 6 recently. Our calculations also showed that CHD isn't among the 30 most popular stocks among hedge funds (view the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you'd ask most traders, hedge funds are seen as worthless, outdated financial tools of years past. While there are greater than 8000 funds with their doors open at present, Our researchers hone in on the crème de la crème of this group, approximately 750 funds. These hedge fund managers shepherd most of all hedge funds' total capital, and by observing their unrivaled stock picks, Insider Monkey has come up with various investment strategies that have historically outrun the S&P 500 index. Insider Monkey's flagship hedge fund strategy beat the S&P 500 index by around 5 percentage points a year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to take a glance at the fresh hedge fund action regarding Church & Dwight Co., Inc. (NYSE:CHD).
How are hedge funds trading Church & Dwight Co., Inc. (NYSE:CHD)?
At the end of the second quarter, a total of 30 of the hedge funds tracked by Insider Monkey were long this stock, a change of 25% from the first quarter of 2019. The graph below displays the number of hedge funds with bullish position in CHD over the last 16 quarters. With hedge funds' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
More specifically, AQR Capital Management was the largest shareholder of Church & Dwight Co., Inc. (NYSE:CHD), with a stake worth $51.1 million reported as of the end of March. Trailing AQR Capital Management was Renaissance Technologies, which amassed a stake valued at $37.6 million. Echo Street Capital Management, Winton Capital Management, and Millennium Management were also very fond of the stock, giving the stock large weights in their portfolios.
With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. ExodusPoint Capital, managed by Michael Gelband, created the largest position in Church & Dwight Co., Inc. (NYSE:CHD). ExodusPoint Capital had $10.1 million invested in the company at the end of the quarter. Matthew Tewksbury's Stevens Capital Management also initiated a $3.1 million position during the quarter. The following funds were also among the new CHD investors: Jeffrey Talpins's Element Capital Management, Ray Dalio's Bridgewater Associates, and Ben Levine, Andrew Manuel and Stefan Renold's LMR Partners.
Let's check out hedge fund activity in other stocks similar to Church & Dwight Co., Inc. (NYSE:CHD). We will take a look at Check Point Software Technologies Ltd. (NASDAQ:CHKP), Kellogg Company (NYSE:K), Shinhan Financial Group Co., Ltd. (NYSE:SHG), and Vulcan Materials Company (NYSE:VMC). This group of stocks' market caps match CHD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CHKP,24,666653,0 K,28,528857,2 SHG,5,7950,1 VMC,52,2028909,4 Average,27.25,808092,1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 27.25 hedge funds with bullish positions and the average amount invested in these stocks was $808 million. That figure was $339 million in CHD's case. Vulcan Materials Company (NYSE:VMC) is the most popular stock in this table. On the other hand Shinhan Financial Group Co., Ltd. (NYSE:SHG) is the least popular one with only 5 bullish hedge fund positions. Church & Dwight Co., Inc. (NYSE:CHD) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on CHD, though not to the same extent, as the stock returned 3.3% during the third quarter and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.