The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Philip Morris International Inc. (NYSE:PM) and determine whether the smart money was really smart about this stock.
Philip Morris International Inc. (NYSE:PM) shareholders have witnessed an increase in support from the world’s most elite money managers recently. Philip Morris International Inc. (NYSE:PM) was in 48 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 60. Our calculations also showed that PM isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind let’s review the new hedge fund action regarding Philip Morris International Inc. (NYSE:PM).
John Rogers of Ariel Investments
Do Hedge Funds Think PM Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 48 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from the previous quarter. On the other hand, there were a total of 50 hedge funds with a bullish position in PM a year ago. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
More specifically, Fundsmith LLP was the largest shareholder of Philip Morris International Inc. (NYSE:PM), with a stake worth $1834.5 million reported as of the end of September. Trailing Fundsmith LLP was GQG Partners, which amassed a stake valued at $1349.4 million. Cedar Rock Capital, Gardner Russo & Gardner, and Ariel Investments 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 Cedar Rock Capital allocated the biggest weight to Philip Morris International Inc. (NYSE:PM), around 18.47% of its 13F portfolio. Stamina Capital Management is also relatively very bullish on the stock, dishing out 10.58 percent of its 13F equity portfolio to PM.
With a general bullishness amongst the heavyweights, key money managers have jumped into Philip Morris International Inc. (NYSE:PM) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the largest call position in Philip Morris International Inc. (NYSE:PM). Balyasny Asset Management had $56.9 million invested in the company at the end of the quarter. Christopher Weldon’s Stamina Capital Management also made a $42.3 million investment in the stock during the quarter. The other funds with new positions in the stock are John Hempton’s Bronte Capital, Ray Dalio’s Bridgewater Associates, and Michael Gelband’s ExodusPoint Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Philip Morris International Inc. (NYSE:PM). These stocks are Intuit Inc. (NASDAQ:INTU), Honeywell International Inc. (NASDAQ:HON), QUALCOMM, Incorporated (NASDAQ:QCOM), Citigroup Inc. (NYSE:C), Royal Bank of Canada (NYSE:RY), Lowe’s Companies, Inc. (NYSE:LOW), and Unilever PLC (NYSE:UL). This group of stocks’ market valuations are similar to PM’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INTU | 64 | 6152464 | -2 |
| HON | 45 | 927738 | -12 |
| QCOM | 70 | 3519652 | -2 |
| C | 79 | 5587345 | -8 |
| RY | 16 | 1103417 | -2 |
| LOW | 60 | 5080325 | -3 |
| UL | 17 | 876681 | -2 |
| Average | 50.1 | 3321089 | -4.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 50.1 hedge funds with bullish positions and the average amount invested in these stocks was $3321 million. That figure was $5925 million in PM’s case. Citigroup Inc. (NYSE:C) is the most popular stock in this table. On the other hand Royal Bank of Canada (NYSE:RY) is the least popular one with only 16 bullish hedge fund positions. Philip Morris International Inc. (NYSE:PM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PM is 56.4. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on PM as the stock returned 10% since the end of the third quarter (through 1/31) and outperformed the market by an even larger margin.
Follow Philip Morris International Inc. (NYSE:PM)
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Disclosure: None. This article was originally published at Insider Monkey.
