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 3M Company (NYSE:MMM).
3M Company (NYSE:MMM) investors should pay attention to an increase in activity from the world’s largest hedge funds lately. 3M Company (NYSE:MMM) was in 46 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 56. Our calculations also showed that MMM 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. With all of this in mind let’s take a look at the new hedge fund action surrounding 3M Company (NYSE:MMM).
Do Hedge Funds Think MMM Is A Good Stock To Buy Now?
At the end of September, a total of 46 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the previous quarter. On the other hand, there were a total of 56 hedge funds with a bullish position in MMM a year ago. With hedge funds’ capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
The largest stake in 3M Company (NYSE:MMM) was held by Fisher Asset Management, which reported holding $983.2 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $356.1 million position. Other investors bullish on the company included AQR Capital Management, Citadel Investment Group, and Markel Gayner Asset Management. In terms of the portfolio weights assigned to each position Hourglass Capital allocated the biggest weight to 3M Company (NYSE:MMM), around 1.2% of its 13F portfolio. Sciencast Management is also relatively very bullish on the stock, setting aside 0.95 percent of its 13F equity portfolio to MMM.
As one would reasonably expect, key hedge funds have been driving this bullishness. Renaissance Technologies, initiated the largest position in 3M Company (NYSE:MMM). Renaissance Technologies had $12.6 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also initiated a $11.9 million position during the quarter. The following funds were also among the new MMM investors: Qing Li’s Sciencast Management, Ray Dalio’s Bridgewater Associates, and Gregg J. Powers’s Private Capital Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as 3M Company (NYSE:MMM) but similarly valued. These stocks are Airbnb, Inc. (NASDAQ:ABNB), Stryker Corporation (NYSE:SYK), Atlassian Corporation Plc (NASDAQ:TEAM), Booking Holdings Inc. (NASDAQ:BKNG), GlaxoSmithKline plc (NYSE:GSK), Lockheed Martin Corporation (NYSE:LMT), and Infosys Limited (NYSE:INFY). This group of stocks’ market valuations are similar to MMM’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ABNB | 58 | 2712558 | 0 |
| SYK | 46 | 3364535 | -2 |
| TEAM | 60 | 6079499 | -4 |
| BKNG | 96 | 8429836 | -4 |
| GSK | 31 | 1658987 | 3 |
| LMT | 51 | 1284495 | -7 |
| INFY | 29 | 2473668 | 7 |
| Average | 53 | 3714797 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 53 hedge funds with bullish positions and the average amount invested in these stocks was $3715 million. That figure was $1625 million in MMM’s case. Booking Holdings Inc. (NASDAQ:BKNG) is the most popular stock in this table. On the other hand Infosys Limited (NYSE:INFY) is the least popular one with only 29 bullish hedge fund positions. 3M Company (NYSE:MMM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MMM is 46.3. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 surpassed the market again by 5.6 percentage points. Unfortunately MMM wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); MMM investors were disappointed as the stock returned -2.3% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
