We at Insider Monkey have gone over 867 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 30th. In this article, we look at what those funds think of The Clorox Company (NYSE:CLX) based on that data.
The Clorox Company (NYSE:CLX) shareholders have witnessed a decrease in support from the world’s most elite money managers in recent months. The Clorox Company (NYSE:CLX) was in 34 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 41. There were 37 hedge funds in our database with CLX positions at the end of the second quarter. Our calculations also showed that CLX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
David Siegel of Two Sigma Advisors
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. Now let’s view the recent hedge fund action encompassing The Clorox Company (NYSE:CLX).
Do Hedge Funds Think CLX Is A Good Stock To Buy Now?
At Q3’s end, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -8% from one quarter earlier. On the other hand, there were a total of 39 hedge funds with a bullish position in CLX a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Andy Brown’s Cedar Rock Capital has the number one position in The Clorox Company (NYSE:CLX), worth close to $268.9 million, corresponding to 6.4% of its total 13F portfolio. The second most bullish fund manager is Renaissance Technologies, holding a $214.2 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish consist of Ken Griffin’s Citadel Investment Group, Cliff Asness’s AQR Capital Management and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Cedar Rock Capital allocated the biggest weight to The Clorox Company (NYSE:CLX), around 6.45% of its 13F portfolio. L2 Asset Management is also relatively very bullish on the stock, designating 0.93 percent of its 13F equity portfolio to CLX.
Judging by the fact that The Clorox Company (NYSE:CLX) has witnessed a decline in interest from hedge fund managers, we can see that there were a few hedge funds that slashed their entire stakes by the end of the third quarter. Interestingly, Jack Woodruff’s Candlestick Capital Management said goodbye to the biggest position of the 750 funds tracked by Insider Monkey, valued at about $65.7 million in call options. Donald Sussman’s fund, Paloma Partners, also said goodbye to its call options, about $4.5 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 3 funds by the end of the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as The Clorox Company (NYSE:CLX) but similarly valued. These stocks are Cenovus Energy Inc (NYSE:CVE), Church & Dwight Co., Inc. (NYSE:CHD), Expeditors International of Washington (NASDAQ:EXPD), Teladoc Health, Inc (NYSE:TDOC), Enphase Energy Inc (NASDAQ:ENPH), Dynatrace, Inc. (NYSE:DT), and NetApp Inc. (NASDAQ:NTAP). This group of stocks’ market valuations match CLX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CVE | 30 | 717847 | -2 |
| CHD | 20 | 1362889 | -15 |
| EXPD | 26 | 452843 | -3 |
| TDOC | 40 | 2836350 | -3 |
| ENPH | 52 | 637786 | 8 |
| DT | 41 | 2389054 | -9 |
| NTAP | 29 | 671456 | -2 |
| Average | 34 | 1295461 | -3.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 34 hedge funds with bullish positions and the average amount invested in these stocks was $1295 million. That figure was $972 million in CLX’s case. Enphase Energy Inc (NASDAQ:ENPH) is the most popular stock in this table. On the other hand Church & Dwight Co., Inc. (NYSE:CHD) is the least popular one with only 20 bullish hedge fund positions. The Clorox Company (NYSE:CLX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CLX is 48.8. 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 CLX wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); CLX investors were disappointed as the stock returned -1% 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.
Follow Clorox Co (NYSE:CLX)
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Disclosure: None. This article was originally published at Insider Monkey.
