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 Deere & Company (NYSE:DE) and determine whether the smart money was really smart about this stock.
Deere & Company (NYSE:DE) investors should pay attention to an increase in hedge fund sentiment recently. Deere & Company (NYSE:DE) was in 54 hedge funds’ portfolios at the end of September. The all time high for this statistic is 54. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that DE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Tom Gayner of Markel Gayner 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 look at the latest hedge fund action encompassing Deere & Company (NYSE:DE).
Do Hedge Funds Think DE Is A Good Stock To Buy Now?
At Q3’s end, a total of 54 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from the second quarter of 2021. By comparison, 42 hedge funds held shares or bullish call options in DE a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
Among these funds, Bill & Melinda Gates Foundation Trust held the most valuable stake in Deere & Company (NYSE:DE), which was worth $346.3 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $256.9 million worth of shares. Markel Gayner Asset Management, Viking Global, and Holocene Advisors 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 Engine No. 1 LLC allocated the biggest weight to Deere & Company (NYSE:DE), around 4.93% of its 13F portfolio. Markel Gayner Asset Management is also relatively very bullish on the stock, designating 3.2 percent of its 13F equity portfolio to DE.
Consequently, key hedge funds were breaking ground themselves. Bill & Melinda Gates Foundation Trust, managed by Michael Larson, established the most outsized position in Deere & Company (NYSE:DE). Bill & Melinda Gates Foundation Trust had $346.3 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $53.9 million position during the quarter. The following funds were also among the new DE investors: Michael Gelband’s ExodusPoint Capital, Gregg Moskowitz’s Interval Partners, and Peter Avellone’s Cartenna Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Deere & Company (NYSE:DE) but similarly valued. We will take a look at S&P Global Inc. (NYSE:SPGI), 3M Company (NYSE:MMM), Airbnb, Inc. (NASDAQ:ABNB), Stryker Corporation (NYSE:SYK), Atlassian Corporation Plc (NASDAQ:TEAM), Booking Holdings Inc. (NASDAQ:BKNG), and GlaxoSmithKline plc (NYSE:GSK). This group of stocks’ market valuations are similar to DE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SPGI | 78 | 7036868 | 7 |
| MMM | 46 | 1624838 | 4 |
| ABNB | 58 | 2712558 | 0 |
| SYK | 46 | 3364535 | -2 |
| TEAM | 60 | 6079499 | -4 |
| BKNG | 96 | 8429836 | -4 |
| GSK | 31 | 1658987 | 3 |
| Average | 59.3 | 4415303 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 59.3 hedge funds with bullish positions and the average amount invested in these stocks was $4415 million. That figure was $2531 million in DE’s case. Booking Holdings Inc. (NASDAQ:BKNG) is the most popular stock in this table. On the other hand GlaxoSmithKline plc (NYSE:GSK) is the least popular one with only 31 bullish hedge fund positions. Deere & Company (NYSE:DE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for DE is 54.7. 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 DE as the stock returned 12.7% since the end of the third quarter (through 1/31) and outperformed the market by an even larger margin.
Follow Deere & Co (NYSE:DE)
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Disclosure: None. This article was originally published at Insider Monkey.
