Hedge Funds Are Betting On Berkshire Hathaway Inc. (BRK.B)

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31st, so let’s proceed with the discussion of the hedge fund sentiment on Berkshire Hathaway Inc. (NYSE:BRK-B).

Berkshire Hathaway Inc. (NYSE:BRK-B) has experienced an increase in enthusiasm from smart money of late. Berkshire Hathaway Inc. (NYSE:BRK-B) was in 111 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 115. Our calculations also showed that BRK-B ranked 13th among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, advertising technology one of the fastest growing industries right now, so we are checking out stock pitches like this under-the-radar adtech stock that can deliver 10x gains. We go through lists like the 10 best hydrogen fuel cell 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to go over the new hedge fund action surrounding Berkshire Hathaway Inc. (NYSE:BRK-B).

Do Hedge Funds Think BRK-B Is A Good Stock To Buy Now?

At Q1’s end, a total of 111 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 1% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BRK-B over the last 23 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

Among these funds, Bill & Melinda Gates Foundation Trust held the most valuable stake in Berkshire Hathaway Inc. (NYSE:BRK.B), which was worth $9479.1 million at the end of the fourth quarter. On the second spot was Gardner Russo & Gardner which amassed $1255.5 million worth of shares. Eagle Capital Management, Arrowstreet Capital, 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 Bill & Melinda Gates Foundation Trust allocated the biggest weight to Berkshire Hathaway Inc. (NYSE:BRK.B), around 45.23% of its 13F portfolio. Chou Associates Management is also relatively very bullish on the stock, designating 40.83 percent of its 13F equity portfolio to BRK-B.

With a general bullishness amongst the heavyweights, some big names were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, initiated the most outsized position in Berkshire Hathaway Inc. (NYSE:BRK.B). Arrowstreet Capital had $798.6 million invested in the company at the end of the quarter. Bo Shan’s Gobi Capital also initiated a $59.1 million position during the quarter. The other funds with brand new BRK-B positions are Marc Lisker, Glenn Fuhrman and John Phelan’s MSDC Management, Parvinder Thiara’s Athanor Capital, and Frank Fu’s CaaS Capital.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Berkshire Hathaway Inc. (NYSE:BRK.B) but similarly valued. These stocks are JPMorgan Chase & Co. (NYSE:JPM), Visa Inc (NYSE:V), Johnson & Johnson (NYSE:JNJ), Walmart Inc. (NYSE:WMT), Mastercard Incorporated (NYSE:MA), UnitedHealth Group Inc. (NYSE:UNH), and The Walt Disney Company (NYSE:DIS). This group of stocks’ market caps are closest to BRK-B’s market cap.

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As you can see these stocks had an average of 112.6 hedge funds with bullish positions and the average amount invested in these stocks was $12340 million. That figure was $19881 million in BRK-B’s case. Visa Inc (NYSE:V) is the most popular stock in this table. On the other hand Walmart Inc. (NYSE:WMT) is the least popular one with only 58 bullish hedge fund positions. Berkshire Hathaway Inc. (NYSE:BRK.B) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BRK-B is 72. 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A smaller number of hedge funds were also right about betting on BRK-B as the stock returned 12.3% since the end of the first quarter (through 6/11) and outperformed the market by an even larger margin.

Disclosure: None. This article was originally published at Insider Monkey.