Here is What Hedge Funds Think About Raytheon Technologies Corp (RTX)

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Raytheon Technologies Corp (NYSE:RTX), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Raytheon Technologies Corp (NYSE:RTX) was in 48 hedge funds’ portfolios at the end of September. The all time high for this statistic is 81. RTX investors should be aware of a decrease in hedge fund sentiment lately. There were 53 hedge funds in our database with RTX holdings at the end of June. Our calculations also showed that RTX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

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. With all of this in mind we’re going to take a gander at the recent hedge fund action surrounding Raytheon Technologies Corp (NYSE:RTX).

Wall Street Bull

Do Hedge Funds Think RTX Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 48 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards RTX over the last 25 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Ken Fisher’s Fisher Asset Management has the number one position in Raytheon Technologies Corp (NYSE:RTX), worth close to $616.2 million, accounting for 0.4% of its total 13F portfolio. Sitting at the No. 2 spot is Farallon Capital, with a $448.3 million position; 2.3% of its 13F portfolio is allocated to the stock. Some other members of the smart money with similar optimism include Panayotis Takis Sparaggis’s Alkeon Capital Management, Israel Englander’s Millennium Management and Dmitry Balyasny’s Balyasny Asset Management. In terms of the portfolio weights assigned to each position Albar Capital allocated the biggest weight to Raytheon Technologies Corp (NYSE:RTX), around 8.21% of its 13F portfolio. MD Sass is also relatively very bullish on the stock, setting aside 6.1 percent of its 13F equity portfolio to RTX.

Judging by the fact that Raytheon Technologies Corp (NYSE:RTX) has witnessed a decline in interest from hedge fund managers, it’s easy to see that there was a specific group of hedgies that decided to sell off their entire stakes last quarter. At the top of the heap, Jeffrey Tannenbaum’s Fir Tree sold off the biggest investment of all the hedgies monitored by Insider Monkey, valued at about $17.1 million in stock. Peter Avellone’s fund, Cartenna Capital, also said goodbye to its stock, about $14.6 million worth. These transactions are important to note, as total hedge fund interest was cut by 5 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Raytheon Technologies Corp (NYSE:RTX). We will take a look at The Boeing Company (NYSE:BA), Union Pacific Corporation (NYSE:UNP), BlackRock, Inc. (NYSE:BLK), The Goldman Sachs Group, Inc. (NYSE:GS), TotalEnergies SE (NYSE:TTE), Advanced Micro Devices, Inc. (NASDAQ:AMD), and International Business Machines Corp. (NYSE:IBM). All of these stocks’ market caps match RTX’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 50.4 hedge funds with bullish positions and the average amount invested in these stocks was $2988 million. That figure was $2259 million in RTX’s case. The Goldman Sachs Group, Inc. (NYSE:GS) is the most popular stock in this table. On the other hand TotalEnergies SE (NYSE:TTE) is the least popular one with only 16 bullish hedge fund positions. Raytheon Technologies Corp (NYSE:RTX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RTX is 45.4. 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 RTX wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); RTX investors were disappointed as the stock returned -5.3% 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.

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Disclosure: None. This article was originally published at Insider Monkey.