Is Anheuser Busch Inbev SA NV (ADR) (NYSE:BUD) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments (for some reason media paid a ton of attention to Ackman’s gigantic JC Penney and Valeant failures) and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Smart money seems to be turning less optimistic about Anheuser Busch Inbev SA NV (ADR) (NYSE:BUD). At the end of September, 32 funds tracked by Insider Monkey held shares of the company, down from 35 funds at the end of June. At the end of this article we will also compare BUD to other stocks including Royal Dutch Shell plc (ADR) (NYSE:RDS), Chevron Corporation (NYSE:CVX), and Alibaba Group Holding Ltd (NYSE:BABA) to get a better sense of its popularity.
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Follow Anheuser Busch Inbev Sa Nv (NYSE:BUD)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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Keeping this in mind, we’re going to take a look at the key action regarding Anheuser Busch Inbev SA NV (ADR) (NYSE:BUD).
How have hedgies been trading Anheuser Busch Inbev SA NV (ADR) (NYSE:BUD)?
A total of 32 of the hedge funds tracked by Insider Monkey were long Anheuser Busch Inbev SA NV (ADR) (NYSE:BUD) at the end of the third quarter, which represents a decline of 9% from the end of June. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Soroban Capital Partners, managed by Eric W. Mandelblatt, holds the largest position in Anheuser Busch Inbev SA NV (ADR) (NYSE:BUD). Soroban Capital Partners has a $1.158 billion call position in the stock, comprising 7% of its 13F portfolio. The same fund also has a $1.0622 billion position held in shares. Other members of the smart money that hold long positions comprise Tom Russo’s Gardner Russo & Gardner, Ken Fisher’s Fisher Asset Management and Doug Silverman, and Alexander Klabin’s Senator Investment Group.
Due to the fact that Anheuser Busch Inbev SA NV (ADR) (NYSE:BUD) has faced declining sentiment from the smart money, it’s safe to say that there were a few hedgies that slashed their full holdings in the third quarter. Interestingly, Stephen Mandel’s Lone Pine Capital dumped the biggest investment of the 700 funds watched by Insider Monkey, comprising close to $554.1 million in stock. First Eagle Investment Management also dumped its stock worth about $207.2 million.
Let’s now take a look at hedge fund activity in other stocks similar to Anheuser Busch Inbev SA NV (ADR) (NYSE:BUD). These stocks are Royal Dutch Shell plc (ADR) (NYSE:RDS), Chevron Corporation (NYSE:CVX), Alibaba Group Holding Ltd (NYSE:BABA), and Novartis AG (ADR) (NYSE:NVS). This group of stocks’ market valuations resemble BUD’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RDS | 34 | 955466 | -3 |
| CVX | 53 | 2240908 | 6 |
| BABA | 104 | 8267577 | 35 |
| NVS | 26 | 914753 | 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 $3.10 billion, which is lower than the $5.85 billion figure in BUD’s case. Alibaba Group Holding Ltd (NYSE:BABA) is the most popular stock in this table. On the other hand, Novartis AG (ADR) (NYSE:NVS) is the least popular one with only 26 bullish hedge fund positions. Anheuser Busch Inbev SA NV (ADR) (NYSE:BUD) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Alibaba Group Holding Ltd (NYSE:BABA) might be a better candidate to consider a long position.
