The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards General Electric Company (NYSE:GE).
General Electric Company (NYSE:GE) shareholders have witnessed a decrease in enthusiasm from smart money recently. General Electric Company (NYSE:GE) was in 67 hedge funds’ portfolios at the end of June. The all time high for this statistic is 74. Our calculations also showed that GE isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Ole Andreas Halvorsen of Viking Global
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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. Now let’s take a glance at the key hedge fund action regarding General Electric Company (NYSE:GE).
Do Hedge Funds Think GE Is A Good Stock To Buy Now?
At second quarter’s end, a total of 67 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -1% from one quarter earlier. On the other hand, there were a total of 57 hedge funds with a bullish position in GE a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Eagle Capital Management held the most valuable stake in General Electric Company (NYSE:GE), which was worth $1512.6 million at the end of the second quarter. On the second spot was Viking Global which amassed $1235.5 million worth of shares. Pzena Investment Management, Trian Partners, and Southeastern Asset Management 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 SAYA Management allocated the biggest weight to General Electric Company (NYSE:GE), around 6.78% of its 13F portfolio. Southeastern Asset Management is also relatively very bullish on the stock, dishing out 5.86 percent of its 13F equity portfolio to GE.
Since General Electric Company (NYSE:GE) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few hedgies who sold off their full holdings by the end of the second quarter. Interestingly, Boykin Curry’s Eagle Capital Management said goodbye to the biggest stake of all the hedgies followed by Insider Monkey, comprising close to $1484.2 million in stock. Brandon Haley’s fund, Holocene Advisors, also dropped its stock, about $152.7 million worth. These transactions are important to note, as total hedge fund interest dropped by 1 funds by the end of the second quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as General Electric Company (NYSE:GE) but similarly valued. We will take a look at HSBC Holdings plc (NYSE:HSBC), Vale SA (NYSE:VALE), The Estee Lauder Companies Inc (NYSE:EL), 3M Company (NYSE:MMM), Advanced Micro Devices, Inc. (NASDAQ:AMD), Zoom Video Communications, Inc. (NASDAQ:ZM), and Diageo plc (NYSE:DEO). All of these stocks’ market caps match GE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HSBC | 11 | 212763 | -1 |
| VALE | 27 | 3573958 | -4 |
| EL | 50 | 4129744 | -9 |
| MMM | 42 | 1582540 | 1 |
| AMD | 63 | 4610011 | 1 |
| ZM | 59 | 8480712 | 5 |
| DEO | 20 | 891081 | -2 |
| Average | 38.9 | 3354401 | -1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.9 hedge funds with bullish positions and the average amount invested in these stocks was $3354 million. That figure was $6087 million in GE’s case. Advanced Micro Devices, Inc. (NASDAQ:AMD) is the most popular stock in this table. On the other hand HSBC Holdings plc (NYSE:HSBC) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks General Electric Company (NYSE:GE) is more popular among hedge funds. Our overall hedge fund sentiment score for GE is 81.2. 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 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. Unfortunately GE wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on GE were disappointed as the stock returned -2.1% since the end of the second quarter (through 9/27) 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 since 2019.
Follow General Electric Co (NYSE:GE)
Follow General Electric Co (NYSE:GE)
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Disclosure: None. This article was originally published at Insider Monkey.
