You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund managers like Jeff Ubben, George Soros and Seth Klarman hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
The Procter & Gamble Company (NYSE:PG) has seen a decrease in support from the world’s most elite money managers in recent months. Our calculations also showed that PG isn’t among the 30 most popular stocks among hedge funds.
In the financial world there are numerous gauges market participants can use to analyze stocks. A couple of the most underrated gauges are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the elite fund managers can beat their index-focused peers by a superb amount (see the details here).
Let’s view the recent hedge fund action regarding The Procter & Gamble Company (NYSE:PG).
Hedge fund activity in The Procter & Gamble Company (NYSE:PG)
Heading into the second quarter of 2019, a total of 56 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -7% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards PG over the last 15 quarters. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
The largest stake in The Procter & Gamble Company (NYSE:PG) was held by Trian Partners, which reported holding $3818.8 million worth of stock at the end of March. It was followed by Cedar Rock Capital with a $1300.6 million position. Other investors bullish on the company included Yacktman Asset Management, Fisher Asset Management, and AQR Capital Management.
Since The Procter & Gamble Company (NYSE:PG) has faced a decline in interest from the smart money, it’s safe to say that there were a few hedgies that elected to cut their positions entirely in the third quarter. At the top of the heap, John Overdeck and David Siegel’s Two Sigma Advisors sold off the biggest investment of the 700 funds monitored by Insider Monkey, valued at about $372.4 million in stock. Jim Simons’s fund, Renaissance Technologies, also sold off its stock, about $18.7 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 4 funds in the third quarter.
Let’s now review hedge fund activity in other stocks similar to The Procter & Gamble Company (NYSE:PG). We will take a look at Verizon Communications Inc. (NYSE:VZ), Mastercard Incorporated (NYSE:MA), Intel Corporation (NASDAQ:INTC), and Cisco Systems, Inc. (NASDAQ:CSCO). This group of stocks’ market valuations are similar to PG’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VZ | 52 | 1472781 | -10 |
| MA | 94 | 11561189 | -2 |
| INTC | 62 | 4307809 | -3 |
| CSCO | 45 | 3154180 | -10 |
| Average | 63.25 | 5123990 | -6.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 63.25 hedge funds with bullish positions and the average amount invested in these stocks was $5124 million. That figure was $9568 million in PG’s case. Mastercard Incorporated (NYSE:MA) is the most popular stock in this table. On the other hand Cisco Systems, Inc. (NASDAQ:CSCO) is the least popular one with only 45 bullish hedge fund positions. The Procter & Gamble Company (NYSE:PG) is not the least popular stock in this group but hedge fund interest is still below average. 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. A small number of hedge funds were also right about betting on PG as the stock returned 1.9% during the same time frame and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
