Is The Boeing Company (NYSE:BA) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
The Boeing Company (NYSE:BA) was in 71 hedge funds’ portfolios at the end of March. BA has experienced an increase in enthusiasm from smart money in recent months. There were 67 hedge funds in our database with BA positions at the end of the previous quarter. Our calculations also showed that BA isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to check out the new hedge fund action encompassing The Boeing Company (NYSE:BA).
Hedge fund activity in The Boeing Company (NYSE:BA)
At Q1’s end, a total of 71 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BA over the last 15 quarters. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
The largest stake in The Boeing Company (NYSE:BA) was held by Citadel Investment Group, which reported holding $898.2 million worth of stock at the end of March. It was followed by AQR Capital Management with a $505.5 million position. Other investors bullish on the company included Arrowstreet Capital, Egerton Capital Limited, and Adage Capital Management.
As industrywide interest jumped, key money managers were breaking ground themselves. Egerton Capital Limited, managed by John Armitage, established the biggest position in The Boeing Company (NYSE:BA). Egerton Capital Limited had $347.6 million invested in the company at the end of the quarter. Aaron Cowen’s Suvretta Capital Management also initiated a $193.1 million position during the quarter. The other funds with new positions in the stock are Anand Parekh’s Alyeska Investment Group, David Costen Haley’s HBK Investments, and David Fiszel’s Honeycomb Asset Management.
Let’s now take a look at hedge fund activity in other stocks similar to The Boeing Company (NYSE:BA). We will take a look at Merck & Co., Inc. (NYSE:MRK), Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM), China Mobile Limited (NYSE:CHL), and The Coca-Cola Company (NYSE:KO). All of these stocks’ market caps are closest to BA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MRK | 64 | 4602295 | -4 |
| TSM | 39 | 3547334 | 2 |
| CHL | 19 | 410052 | 5 |
| KO | 48 | 20680037 | -5 |
| Average | 42.5 | 7309930 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 42.5 hedge funds with bullish positions and the average amount invested in these stocks was $7310 million. That figure was $4346 million in BA’s case. Merck & Co., Inc. (NYSE:MRK) is the most popular stock in this table. On the other hand China Mobile Limited (NYSE:CHL) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks The Boeing Company (NYSE:BA) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately BA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on BA were disappointed as the stock returned -7.7% during the same period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
