Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Colgate-Palmolive Company (NYSE:CL) based on that data and determine whether they were really smart about the stock.
Colgate-Palmolive Company (NYSE:CL) investors should pay attention to a decrease in support from the world’s most elite money managers in recent months. Colgate-Palmolive Company (NYSE:CL) was in 54 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 58. Our calculations also showed that CL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Dmitry Balyasny of Balyasny Asset Management
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. Keeping this in mind let’s take a glance at the latest hedge fund action regarding Colgate-Palmolive Company (NYSE:CL).
Do Hedge Funds Think CL Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 54 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from the second quarter of 2021. On the other hand, there were a total of 47 hedge funds with a bullish position in CL 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.
More specifically, GuardCap Asset Management was the largest shareholder of Colgate-Palmolive Company (NYSE:CL), with a stake worth $486.5 million reported as of the end of September. Trailing GuardCap Asset Management was Arrowstreet Capital, which amassed a stake valued at $303.7 million. Renaissance Technologies, Citadel Investment Group, and D E Shaw 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 GuardCap Asset Management allocated the biggest weight to Colgate-Palmolive Company (NYSE:CL), around 6.7% of its 13F portfolio. Kehrs Ridge Capital is also relatively very bullish on the stock, setting aside 4.39 percent of its 13F equity portfolio to CL.
Because Colgate-Palmolive Company (NYSE:CL) has faced bearish sentiment from hedge fund managers, we can see that there lies a certain “tier” of hedgies that decided to sell off their entire stakes by the end of the third quarter. At the top of the heap, Alexander Mitchell’s Scopus Asset Management dumped the largest stake of the 750 funds watched by Insider Monkey, totaling about $56.9 million in stock, and Donald Sussman’s Paloma Partners was right behind this move, as the fund said goodbye to about $24.4 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 4 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Colgate-Palmolive Company (NYSE:CL) but similarly valued. These stocks are Illumina, Inc. (NASDAQ:ILMN), Waste Management, Inc. (NYSE:WM), Autodesk, Inc. (NASDAQ:ADSK), Banco Santander, S.A. (NYSE:SAN), VMware, Inc. (NYSE:VMW), Workday Inc (NYSE:WDAY), and Boston Scientific Corporation (NYSE:BSX). All of these stocks’ market caps are closest to CL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ILMN | 55 | 2801228 | 4 |
| WM | 36 | 3629155 | -3 |
| ADSK | 54 | 2356939 | -10 |
| SAN | 14 | 543799 | -3 |
| VMW | 31 | 618586 | 3 |
| WDAY | 72 | 6389641 | 0 |
| BSX | 47 | 3051321 | -4 |
| Average | 44.1 | 2770096 | -1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 44.1 hedge funds with bullish positions and the average amount invested in these stocks was $2770 million. That figure was $2578 million in CL’s case. Workday Inc (NYSE:WDAY) is the most popular stock in this table. On the other hand Banco Santander, S.A. (NYSE:SAN) is the least popular one with only 14 bullish hedge fund positions. Colgate-Palmolive Company (NYSE:CL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CL is 63.4. 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. Hedge funds were also right about betting on CL as the stock returned 10.3% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
