The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards NIKE, Inc. (NYSE:NKE).
Is NIKE, Inc. (NYSE:NKE) a buy, sell, or hold? The best stock pickers were getting less optimistic. The number of bullish hedge fund bets dropped by 11 lately. NIKE, Inc. (NYSE:NKE) was in 67 hedge funds’ portfolios at the end of June. The all time high for this statistic is 82. Our calculations also showed that NKE isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Dmitry Balyasny of Balyasny Asset Management
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Do Hedge Funds Think NKE Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 67 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from one quarter earlier. By comparison, 71 hedge funds held shares or bullish call options in NKE a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Fundsmith LLP was the largest shareholder of NIKE, Inc. (NYSE:NKE), with a stake worth $1352.7 million reported as of the end of June. Trailing Fundsmith LLP was Fisher Asset Management, which amassed a stake valued at $1169.4 million. Arrowstreet Capital, GuardCap Asset Management, 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 Broad Peak Investment Holdings allocated the biggest weight to NIKE, Inc. (NYSE:NKE), around 10.32% of its 13F portfolio. GuardCap Asset Management is also relatively very bullish on the stock, earmarking 7.74 percent of its 13F equity portfolio to NKE.
Since NIKE, Inc. (NYSE:NKE) has faced a decline in interest from the smart money, logic holds that there lies a certain “tier” of fund managers that decided to sell off their full holdings by the end of the second quarter. At the top of the heap, Daniel Sundheim’s D1 Capital Partners cut the biggest stake of all the hedgies followed by Insider Monkey, worth close to $223.4 million in stock. Aaron Cowen’s fund, Suvretta Capital Management, also dropped its stock, about $143 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 11 funds by the end of the second quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as NIKE, Inc. (NYSE:NKE) but similarly valued. These stocks are Netflix, Inc. (NASDAQ:NFLX), The Coca-Cola Company (NYSE:KO), Verizon Communications Inc. (NYSE:VZ), Intel Corporation (NASDAQ:INTC), salesforce.com, inc. (NYSE:CRM), Cisco Systems, Inc. (NASDAQ:CSCO), and Eli Lilly and Company (NYSE:LLY). This group of stocks’ market values are similar to NKE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NFLX | 113 | 13216589 | 3 |
| KO | 62 | 24965786 | 1 |
| VZ | 63 | 10958091 | -6 |
| INTC | 78 | 6764047 | -5 |
| CRM | 108 | 11767293 | 17 |
| CSCO | 60 | 4219112 | 1 |
| LLY | 64 | 2994849 | 9 |
| Average | 78.3 | 10697967 | 2.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 78.3 hedge funds with bullish positions and the average amount invested in these stocks was $10698 million. That figure was $6425 million in NKE’s case. Netflix, Inc. (NASDAQ:NFLX) is the most popular stock in this table. On the other hand Cisco Systems, Inc. (NASDAQ:CSCO) is the least popular one with only 60 bullish hedge fund positions. NIKE, Inc. (NYSE:NKE) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NKE is 25.1. 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 25.7% in 2021 through September 27th and surpassed the market again by 6.2 percentage points. Unfortunately NKE wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); NKE investors were disappointed as the stock returned -4% since the end of June (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 in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.
