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 3M Company (NYSE:MMM) and determine whether the smart money was really smart about this stock.
3M Company (NYSE:MMM) investors should be aware of an increase in hedge fund interest of late. 3M Company (NYSE:MMM) was in 46 hedge funds’ portfolios at the end of September. The all time high for this statistic is 56. There were 42 hedge funds in our database with MMM holdings at the end of June. Our calculations also showed that MMM 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. Now let’s analyze the new hedge fund action surrounding 3M Company (NYSE:MMM).
Ray Dalio of Bridgewater Associates
Do Hedge Funds Think MMM Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 46 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in MMM over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Fisher Asset Management was the largest shareholder of 3M Company (NYSE:MMM), with a stake worth $983.2 million reported as of the end of September. Trailing Fisher Asset Management was Citadel Investment Group, which amassed a stake valued at $356.1 million. AQR Capital Management, Citadel Investment Group, and Markel Gayner Asset 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 Hourglass Capital allocated the biggest weight to 3M Company (NYSE:MMM), around 1.2% of its 13F portfolio. Sciencast Management is also relatively very bullish on the stock, designating 0.95 percent of its 13F equity portfolio to MMM.
As aggregate interest increased, some big names were leading the bulls’ herd. Renaissance Technologies, established the most valuable position in 3M Company (NYSE:MMM). Renaissance Technologies had $12.6 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also made a $11.9 million investment in the stock during the quarter. The following funds were also among the new MMM investors: Qing Li’s Sciencast Management, Ray Dalio’s Bridgewater Associates, and Gregg J. Powers’s Private Capital Management.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as 3M Company (NYSE:MMM) but similarly valued. These stocks are Airbnb, Inc. (NASDAQ:ABNB), Stryker Corporation (NYSE:SYK), Atlassian Corporation Plc (NASDAQ:TEAM), Booking Holdings Inc. (NASDAQ:BKNG), GlaxoSmithKline plc (NYSE:GSK), Lockheed Martin Corporation (NYSE:LMT), and Infosys Limited (NYSE:INFY). This group of stocks’ market caps resemble MMM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ABNB | 58 | 2712558 | 0 |
| SYK | 46 | 3364535 | -2 |
| TEAM | 60 | 6079499 | -4 |
| BKNG | 96 | 8429836 | -4 |
| GSK | 31 | 1658987 | 3 |
| LMT | 51 | 1284495 | -7 |
| INFY | 29 | 2473668 | 7 |
| Average | 53 | 3714797 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 53 hedge funds with bullish positions and the average amount invested in these stocks was $3715 million. That figure was $1625 million in MMM’s case. Booking Holdings Inc. (NASDAQ:BKNG) is the most popular stock in this table. On the other hand Infosys Limited (NYSE:INFY) is the least popular one with only 29 bullish hedge fund positions. 3M Company (NYSE:MMM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MMM is 46.3. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 surpassed the market again by 3.6 percentage points. Unfortunately, MMM wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); MMM investors were disappointed as the stock returned -4.6% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
