Does The Coca-Cola Company (NYSE:KO) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund sentiment towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail unconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.
The Coca-Cola Company (NYSE:KO) has experienced a slight decrease in support from the world’s most elite money managers recently. At the end of this article we will also compare KO to other stocks, including The Walt Disney Company (NYSE:DIS), Anheuser-Busch InBev NV (ADR) (NYSE:BUD), and Bank of America Corp (NYSE:BAC) to get a better sense of its popularity.
Follow Coca Cola Co (NYSE:KO)
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At the moment there are plenty of signals shareholders put to use to evaluate publicly traded companies. A duo of the most innovative signals are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the best hedge fund managers can outperform their index-focused peers by a very impressive margin (see the details here).
With all of this in mind, we’re going to take a look at the new action surrounding The Coca-Cola Company (NYSE:KO).
How have hedgies been trading The Coca-Cola Company (NYSE:KO)?
At the end of the third quarter, a total of 54 of the funds tracked by Insider Monkey were bullish on this stock, a change of -13% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Warren Buffett’s Berkshire Hathaway has the most valuable position in The Coca-Cola Company (NYSE:KO), worth close to $16.048 billion, accounting for 12.6% of its total 13F portfolio. The second largest stake is held by Yacktman Asset Management, managed by Donald Yacktman, which holds an $998.6 million position; 6.6% of its 13F portfolio is allocated to the company. Some other peers that are bullish consist of Ken Fisher’s Fisher Asset Management, D. E. Shaw’s D E Shaw and Phill Gross and Robert Atchinson’s Adage Capital Management.
Judging by the fact that The Coca-Cola Company (NYSE:KO) has experienced falling interest from hedge fund managers, it’s easy to see that there lies a certain “tier” of funds that elected to cut their entire stakes in the third quarter. Intriguingly, Peter Muller’s PDT Partners dropped the biggest investment of all the hedgies watched by Insider Monkey, valued at close to $50.9 million in call options. James Dinan’s fund, York Capital Management, also dropped its call options, about $39.2 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 8 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as The Coca-Cola Company (NYSE:KO) but similarly valued. These stocks are The Walt Disney Company (NYSE:DIS), Anheuser-Busch InBev NV (ADR) (NYSE:BUD), Bank of America Corp (NYSE:BAC), and Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT). All of these stocks’ market caps are closest to KO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DIS | 48 | 3367786 | -12 |
| BUD | 49 | 5338832 | 8 |
| BAC | 108 | 6448158 | 13 |
| NTT | 12 | 133784 | 4 |
As you can see these stocks had an average of 54 hedge funds with bullish positions and the average amount invested in these stocks was $3.82 billion. Bank of America Corp (NYSE:BAC) is the most popular stock in this table, while, Nippon Telegraph & Telephone Corp (ADR) (NYSE:NTT) is the least popular one with only 12 bullish hedge fund positions. The Coca-Cola Company (NYSE:KO) is not the least popular stock in this group, but hedge fund interest is still below average. On the other hand, the funds we track have amassed $19.33 billion worth of the company’s stock. Considering that, despite the decline, Coca-Cola still is a popular pick among hedge funds and enjoys the support of some of the best investors in the world, it may be a good idea to take a closer look at the company. However, we prefer to look into stocks that hedge funds are collectively the most bullish on, such as Bank of America, in this case.
