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. In this article we look at what those investors think of Costco Wholesale Corporation (NASDAQ:COST).
Costco Wholesale Corporation (NASDAQ:COST) was in 55 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 73. COST has experienced an increase in hedge fund sentiment of late. There were 54 hedge funds in our database with COST positions at the end of the second quarter. Our calculations also showed that COST 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 analyze the key hedge fund action regarding Costco Wholesale Corporation (NASDAQ:COST).
Peter Algert of Algert Global
Do Hedge Funds Think COST Is A Good Stock To Buy Now?
At the end of September, a total of 55 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards COST over the last 25 quarters. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
More specifically, Fisher Asset Management was the largest shareholder of Costco Wholesale Corporation (NASDAQ:COST), with a stake worth $1746.7 million reported as of the end of September. Trailing Fisher Asset Management was Citadel Investment Group, which amassed a stake valued at $894.1 million. Arrowstreet Capital, Bridgewater Associates, 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 Unio Capital allocated the biggest weight to Costco Wholesale Corporation (NASDAQ:COST), around 5.98% of its 13F portfolio. Chilton Investment Company is also relatively very bullish on the stock, setting aside 4.62 percent of its 13F equity portfolio to COST.
Consequently, specific money managers were breaking ground themselves. Laurion Capital Management, managed by Benjamin A. Smith, created the most valuable call position in Costco Wholesale Corporation (NASDAQ:COST). Laurion Capital Management had $60.3 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $9.9 million investment in the stock during the quarter. The other funds with brand new COST positions are Alec Litowitz and Ross Laser’s Magnetar Capital, Peter Algert’s Algert Global, and Greg Eisner’s Engineers Gate Manager.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Costco Wholesale Corporation (NASDAQ:COST) but similarly valued. We will take a look at Chevron Corporation (NYSE:CVX), AT&T Inc. (NYSE:T), AbbVie Inc (NYSE:ABBV), Wells Fargo & Company (NYSE:WFC), Merck & Co., Inc. (NYSE:MRK), AstraZeneca plc (NASDAQ:AZN), and Novartis AG (NYSE:NVS). All of these stocks’ market caps resemble COST’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CVX | 51 | 4442202 | 1 |
| T | 66 | 3212098 | -2 |
| ABBV | 81 | 4140050 | -1 |
| WFC | 88 | 6188279 | -6 |
| MRK | 77 | 4550626 | -2 |
| AZN | 41 | 3757394 | 4 |
| NVS | 22 | 1439973 | 0 |
| Average | 60.9 | 3961517 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 60.9 hedge funds with bullish positions and the average amount invested in these stocks was $3962 million. That figure was $4393 million in COST’s case. Wells Fargo & Company (NYSE:WFC) is the most popular stock in this table. On the other hand Novartis AG (NYSE:NVS) is the least popular one with only 22 bullish hedge fund positions. Costco Wholesale Corporation (NASDAQ:COST) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for COST is 53.6. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. A small number of hedge funds were also right about betting on COST as the stock returned 20.2% since the end of the third quarter (through 11/30) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
