We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30. In this article we look at what those investors think of Procter & Gamble Co (NYSE:PG).
Is Procter & Gamble Co (NYSE:PG) a healthy stock for your portfolio? Investors who are in the know seem to be taking a bullish view, as the number of investors from our database long the stock rose by 15 to 71 during the third quarter. However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Pfizer Inc. (NYSE:PFE), Anheuser-Busch InBev NV (ADR) (NYSE:BUD), and Royal Dutch Shell plc (ADR) (NYSE:RDS) to gather more data points.
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, we’re going to take a look at the latest action encompassing Procter & Gamble Co (NYSE:PG).
How have hedgies been trading Procter & Gamble Co (NYSE:PG)?
At the end of September, 71 funds tracked by Insider Monkey were bullish on Procter & Gamble, a change of 27% from the end of the second quarter of 2016. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Israel Englander’s Millennium Management has the number one position in Procter & Gamble Co (NYSE:PG), worth close to $6.51 billion, accounting for 10.9% of its total 13F portfolio. The second most bullish fund manager is OZ Management, led by Daniel S. Och, holding a $2.19 billion call position; 12.6% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors with similar optimism contain Donald Yacktman’s Yacktman Asset Management and Neil Chriss’ Hutchin Hill Capital.
Now, specific money managers were leading the bulls’ herd. OZ Management, managed by Daniel S. Och, initiated the biggest call position in Procter & Gamble Co (NYSE:PG). O Matthew Halbower’s Pentwater Capital Management also made a $1.72 billion investment in the stock during the third quarter. The other funds with new positions in the stock are Benjamin A. Smith’s Laurion Capital Management and Brian Taylor’s Pine River Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Procter & Gamble Co (NYSE:PG) but similarly valued. We will take a look at Pfizer Inc. (NYSE:PFE), Anheuser-Busch InBev NV (ADR) (NYSE:BUD), Royal Dutch Shell plc (ADR) (NYSE:RDS), and Chevron Corporation (NYSE:CVX). This group of stocks’ market valuations match PG’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PFE | 83 | 5499374 | -11 |
| BUD | 32 | 5851359 | -3 |
| RDS | 34 | 955466 | -3 |
| CVX | 53 | 2240908 | 6 |
As you can see these stocks had an average of 51 investors with bullish positions at the end of September and the average amount invested in these stocks was $3.64 billion. By comparison, the 71 funds bullish on PG amassed $20.10 billion worth of shares heading into the fourth quarter. Pfizer Inc. (NYSE:PFE) is the most popular stock in this table with 83 funds holding shares. On the other hand Anheuser-Busch InBev NV (ADR) (NYSE:BUD) is the least popular one with only 32 bullish hedge fund positions. The Procter & Gamble Company (NYSE:PG) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Pfizer Inc. (NYSE:PFE) might be a better candidate to consider a long position.
