Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Johnson Controls International plc (NYSE:JCI) based on that data and determine whether they were really smart about the stock.
Johnson Controls International plc (NYSE:JCI) was in 45 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 55. JCI investors should pay attention to an increase in hedge fund sentiment recently. There were 39 hedge funds in our database with JCI holdings at the end of June. Our calculations also showed that JCI 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 look at the key hedge fund action encompassing Johnson Controls International plc (NYSE:JCI).
Brad Farber of Atika Capital
Do Hedge Funds Think JCI Is A Good Stock To Buy Now?
At third quarter’s end, a total of 45 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 15% from the second quarter of 2021. By comparison, 24 hedge funds held shares or bullish call options in JCI a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Citadel Investment Group was the largest shareholder of Johnson Controls International plc (NYSE:JCI), with a stake worth $243.5 million reported as of the end of September. Trailing Citadel Investment Group was Holocene Advisors, which amassed a stake valued at $208.9 million. AQR Capital Management, Bridgewater Associates, and Adage Capital Management 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 Otter Creek Management allocated the biggest weight to Johnson Controls International plc (NYSE:JCI), around 2.26% of its 13F portfolio. Sirios Capital Management is also relatively very bullish on the stock, earmarking 2.13 percent of its 13F equity portfolio to JCI.
With a general bullishness amongst the heavyweights, some big names have jumped into Johnson Controls International plc (NYSE:JCI) headfirst. TwinBeech Capital, managed by Jinghua Yan, established the biggest position in Johnson Controls International plc (NYSE:JCI). TwinBeech Capital had $12.6 million invested in the company at the end of the quarter. Brad Farber’s Atika Capital also initiated a $9.5 million position during the quarter. The following funds were also among the new JCI investors: Mika Toikka’s AlphaCrest Capital Management, Roger Keith Long’s Otter Creek Management, and Javier Velazquez’s Albar Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Johnson Controls International plc (NYSE:JCI) but similarly valued. We will take a look at Keurig Dr Pepper Inc. (NASDAQ:KDP), Coupang, Inc. (NYSE:CPNG), Wipro Limited (NYSE:WIT), Marriott International Inc (NYSE:MAR), Twitter Inc (NYSE:TWTR), Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG), and Coinbase Global Inc. (NASDAQ:COIN). This group of stocks’ market valuations are similar to JCI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KDP | 33 | 1269519 | 5 |
| CPNG | 45 | 10769505 | 12 |
| WIT | 15 | 183023 | 1 |
| MAR | 39 | 2878858 | -10 |
| TWTR | 94 | 6305635 | 5 |
| SMFG | 11 | 50245 | 0 |
| COIN | 50 | 2968201 | 50 |
| Average | 41 | 3489284 | 9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 41 hedge funds with bullish positions and the average amount invested in these stocks was $3489 million. That figure was $1032 million in JCI’s case. Twitter Inc (NYSE:TWTR) is the most popular stock in this table. On the other hand Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG) is the least popular one with only 11 bullish hedge fund positions. Johnson Controls International plc (NYSE:JCI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for JCI is 55. 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. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on JCI as the stock returned 7.2% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Johnson Controls Inc (Old Filings) (NYSE:JCI)
Follow Johnson Controls Inc (Old Filings) (NYSE:JCI)
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Disclosure: None. This article was originally published at Insider Monkey.
