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Msg  6813 of 7919  at  4/21/2021 10:06:06 AM  by


The following message was updated on 4/21/2021 10:07:07 AM.

Were Hedge Funds Right About Piling Into Bristol Myers Squibb Company (BMY)?


Were Hedge Funds Right About Piling Into Bristol Myers Squibb Company (BMY)?

Debasis Saha

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Bristol Myers Squibb Company (NYSE:BMY), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Bristol Myers Squibb Company (NYSE:BMY) was in 131 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 136. BMY investors should be aware of an increase in support from the world's most elite money managers lately. There were 124 hedge funds in our database with BMY positions at the end of the third quarter. Our calculations also showed that BMY ranked #13 among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).


At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under position: absolute;0 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind we're going to take a glance at the recent hedge fund action encompassing Bristol Myers Squibb Company (NYSE:BMY).

Do Hedge Funds Think BMY Is A Good Stock To Buy Now?

At fourth quarter's end, a total of 131 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from the third quarter of 2020. By comparison, 122 hedge funds held shares or bullish call options in BMY a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is BMY A Good Stock To Buy?
Is BMY A Good Stock To Buy?

When looking at the institutional investors followed by Insider Monkey, Warren Buffett's Berkshire Hathaway has the most valuable position in Bristol Myers Squibb Company (NYSE:BMY), worth close to $2.0678 billion, corresponding to 0.8% of its total 13F portfolio. The second largest stake is held by Renaissance Technologies, with a position: absolute;.1464 billion position; the fund has 1.2% of its 13F portfolio invested in the stock. Other peers that hold long positions comprise Rajiv Jain's GQG Partners, OrbiMed Advisors and Noam Gottesman's GLG Partners. In terms of the portfolio weights assigned to each position FinePoint Capital allocated the biggest weight to Bristol Myers Squibb Company (NYSE:BMY), around 100% of its 13F portfolio. Birchview Capital is also relatively very bullish on the stock, earmarking 28.39 percent of its 13F equity portfolio to BMY.

As one would reasonably expect, specific money managers have jumped into Bristol Myers Squibb Company (NYSE:BMY) headfirst. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, established the most outsized position in Bristol Myers Squibb Company (NYSE:BMY). Senator Investment Group had $55.8 million invested in the company at the end of the quarter. Doron Breen and Mori Arkin's Sphera Global Healthcare Fund also made a $38.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Carl Tiedemann and Michael Tiedemann's TIG Advisors, Christopher James's Partner Fund Management, and Dmitry Balyasny's Balyasny Asset Management.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Bristol Myers Squibb Company (NYSE:BMY) but similarly valued. We will take a look at Linde plc (NYSE:LIN), Shopify Inc (NYSE:SHOP), Anheuser-Busch InBev SA/NV (NYSE:BUD), JD.Com Inc (NASDAQ:JD), Royal Dutch Shell plc (NYSE:RDS), Amgen, Inc. (NASDAQ:AMGN), and BHP Group (NYSE:BBL). This group of stocks' market values are similar to BMY's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LIN,50,3950824,-10 SHOP,90,8723023,9 BUD,18,1294786,0 JD,89,14395875,4 RDS,34,1661345,3 AMGN,49,1039614,4 BBL,18,1215975,2 Average,49.7,4611635,1.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 49.7 hedge funds with bullish positions and the average amount invested in these stocks was $4612 million. That figure was $6088 million in BMY's case. Shopify Inc (NYSE:SHOP) is the most popular stock in this table. On the other hand Anheuser-Busch InBev SA/NV (NYSE:BUD) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Bristol Myers Squibb Company (NYSE:BMY) is more popular among hedge funds. Our overall hedge fund sentiment score for BMY is 92.9. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Unfortunately BMY wasn't nearly as successful as these 30 stocks and hedge funds that were betting on BMY were disappointed as the stock returned 6.6% since the end of the fourth quarter (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the more diversified list of the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.


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