The latest 13F reporting period has come and gone, and 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, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Pfizer Inc. (NYSE:PFE) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Pfizer Inc. (NYSE:PFE) investors should pay attention to an increase in support from the world’s most elite money managers in recent months. Pfizer Inc. (NYSE:PFE) was in 74 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 119. There were 67 hedge funds in our database with PFE holdings at the end of June. Our calculations also showed that PFE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Cliff Asness of AQR Capital 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. Now let’s go over the key hedge fund action regarding Pfizer Inc. (NYSE:PFE).
Do Hedge Funds Think PFE Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 74 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PFE over the last 25 quarters. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Pfizer Inc. (NYSE:PFE), with a stake worth $320.8 million reported as of the end of September. Trailing Renaissance Technologies was Citadel Investment Group, which amassed a stake valued at $251.2 million. Adage Capital Management, AQR Capital Management, and Citadel Investment Group 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 Copernicus Capital Management allocated the biggest weight to Pfizer Inc. (NYSE:PFE), around 15.61% of its 13F portfolio. Caxton Associates LP is also relatively very bullish on the stock, dishing out 7.03 percent of its 13F equity portfolio to PFE.
Now, specific money managers have been driving this bullishness. Adage Capital Management, managed by Phill Gross and Robert Atchinson, established the most valuable position in Pfizer Inc. (NYSE:PFE). Adage Capital Management had $247.7 million invested in the company at the end of the quarter. Catherine D. Wood’s ARK Investment Management also initiated a $95.4 million position during the quarter. The following funds were also among the new PFE investors: Bruce Kovner’s Caxton Associates LP, Doron Breen and Mori Arkin’s Sphera Global Healthcare Fund, and Farallon Capital.
Let’s now take a look at hedge fund activity in other stocks similar to Pfizer Inc. (NYSE:PFE). We will take a look at Oracle Corporation (NASDAQ:ORCL), NIKE, Inc. (NYSE:NKE), Cisco Systems, Inc. (NASDAQ:CSCO), The Coca-Cola Company (NYSE:KO), Thermo Fisher Scientific Inc. (NYSE:TMO), Verizon Communications Inc. (NYSE:VZ), and Eli Lilly and Company (NYSE:LLY). All of these stocks’ market caps match PFE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ORCL | 56 | 3473487 | 1 |
| NKE | 70 | 5682126 | 3 |
| CSCO | 63 | 3937668 | 3 |
| KO | 61 | 25137199 | -1 |
| TMO | 94 | 8210112 | 7 |
| VZ | 57 | 10359205 | -6 |
| LLY | 62 | 4287033 | -2 |
| Average | 66.1 | 8726690 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 66.1 hedge funds with bullish positions and the average amount invested in these stocks was $8727 million. That figure was $2663 million in PFE’s case. Thermo Fisher Scientific Inc. (NYSE:TMO) is the most popular stock in this table. On the other hand Oracle Corporation (NASDAQ:ORCL) is the least popular one with only 56 bullish hedge fund positions. Pfizer Inc. (NYSE:PFE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PFE is 52.3. 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. 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 PFE as the stock returned 24.5% 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.
