The Insider Monkey team has completed processing the quarterly 13F filings for the December quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Bristol Myers Squibb Company (NYSE:BMY).
Is Bristol Myers Squibb Company (BMY) stock a buy or sell? BMY shareholders have witnessed an increase in enthusiasm from smart money lately. Bristol Myers Squibb Company (NYSE:BMY) was in 131 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 136. Our calculations also showed that BMY ranked 13th among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage (or at the end of this article). Now let’s go over the fresh hedge fund action encompassing Bristol Myers Squibb Company (NYSE:BMY).
Do Hedge Funds Think BMY Is A Good Stock To Buy Now?
At fourth quarter’s end, a total of 131 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the previous quarter. By comparison, 122 hedge funds held shares or bullish call options in BMY a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Bristol Myers Squibb Company (NYSE:BMY) was held by Berkshire Hathaway, which reported holding $2067.8 million worth of stock at the end of December. It was followed by Renaissance Technologies with a $1146.4 million position. Other investors bullish on the company included GQG Partners, OrbiMed Advisors, and GLG Partners. In terms of the portfolio weights assigned to each position FinePoint Capital allocated the biggest weight to Bristol Myers Squibb Company (NYSE:BMY), around 100% of its 13F portfolio. Birchview Capital is also relatively very bullish on the stock, dishing out 28.39 percent of its 13F equity portfolio to BMY.
As one would reasonably expect, key hedge funds have been driving this bullishness. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, established the biggest position in Bristol Myers Squibb Company (NYSE:BMY). Senator Investment Group had $55.8 million invested in the company at the end of the quarter. Doron Breen and Mori Arkin’s Sphera Global Healthcare Fund also initiated a $38.8 million position during the quarter. The other funds with brand new BMY positions are Carl Tiedemann and Michael Tiedemann’s TIG Advisors, Christopher James’s Partner Fund Management, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s now take a look at hedge fund activity in other stocks similar to Bristol Myers Squibb Company (NYSE:BMY). We will take a look at Chevron Corporation (NYSE:CVX), Zoom Video Communications, Inc. (NASDAQ:ZM), Union Pacific Corporation (NYSE:UNP), QUALCOMM, Incorporated (NASDAQ:QCOM), China Mobile Limited (NYSE:CHL), Texas Instruments Incorporated (NASDAQ:TXN), and BHP Group (NYSE:BHP). All of these stocks’ market caps match BMY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CVX | 50 | 5390278 | 7 |
| ZM | 59 | 6002261 | 3 |
| UNP | 68 | 3539131 | -6 |
| QCOM | 85 | 2727547 | -2 |
| CHL | 13 | 275668 | 3 |
| TXN | 56 | 2497473 | 1 |
| BHP | 20 | 1099946 | 2 |
| Average | 50.1 | 3076043 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 50.1 hedge funds with bullish positions and the average amount invested in these stocks was $3076 million. That figure was $6088 million in BMY’s case. QUALCOMM, Incorporated (NASDAQ:QCOM) is the most popular stock in this table. On the other hand China Mobile Limited (NYSE:CHL) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Bristol Myers Squibb Company (NYSE:BMY) is more popular among hedge funds. Our overall hedge fund sentiment score for BMY is 92.9. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7% in 2021 through March 12th and still beat the market by 1.6 percentage points. Unfortunately BMY wasn’t nearly as successful as these 30 stocks and hedge funds that were betting on BMY were disappointed as the stock returned -2.2% since the end of the fourth quarter (through 3/12) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the more diversified list of the top 30 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
