Is Colgate-Palmolive Company (NYSE:CL) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Colgate-Palmolive Company (NYSE:CL) a good investment now? The best stock pickers are in a bearish mood. The number of long hedge fund positions were cut by 4 recently. CL was in 31 hedge funds’ portfolios at the end of the third quarter of 2015. There were 35 hedge funds in our database with CL holdings at the end of the previous quarter. At the end of this article we will also compare CL to other stocks including Simon Property Group, Inc (NYSE:SPG), Time Warner Inc (NYSE:TWX), and Telefonica S.A. (ADR) (NYSE:TEF) to get a better sense of its popularity.
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With all of this in mind, let’s take a peek at the latest action regarding Colgate-Palmolive Company (NYSE:CL).
How are hedge funds trading Colgate-Palmolive Company (NYSE:CL)?
Heading into Q4, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -11% from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Jim Simons’ Renaissance Technologies has the most valuable position in Colgate-Palmolive Company (NYSE:CL), worth close to $725.8 million, accounting for 1.7% of its total 13F portfolio. On Renaissance Technologies’ heels is Two Sigma Advisors, managed by John Overdeck and David Siegel, which holds a $112.1 million position; 0.7% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions encompass Donald Yacktman’s Yacktman Asset Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Phill Gross and Robert Atchinson’s Adage Capital Management.
Judging by the fact that Colgate-Palmolive Company (NYSE:CL) has witnessed a declination in interest from the smart money, logic holds that there was a specific group of hedgies who sold off their full holdings by the end of the third quarter. Interestingly, Mark Kingdon’s Kingdon Capital cut the biggest investment of all the hedgies watched by Insider Monkey, comprising about $13.1 million in stock, and Matthew Tewksbury’s Stevens Capital Management was right behind this move, as the fund dropped about $6.9 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 4 funds by the end of the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Colgate-Palmolive Company (NYSE:CL) but similarly valued. These stocks are Simon Property Group, Inc (NYSE:SPG), Time Warner Inc (NYSE:TWX), Telefonica S.A. (ADR) (NYSE:TEF), and America Movil SAB de CV (ADR) (NYSE:AMX). This group of stocks’ market valuations match CL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SPG | 30 | 1164516 | 2 |
| TWX | 69 | 4320751 | 1 |
| TEF | 5 | 10456 | -1 |
| AMX | 12 | 239063 | -2 |
As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $1,434 million. That figure was $1,803 million in CL’s case. Time Warner Inc (NYSE:TWX) is the most popular stock in this table. On the other hand Telefonica S.A. (ADR) (NYSE:TEF) is the least popular one with only 5 bullish hedge fund positions. Colgate-Palmolive Company (NYSE:CL) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TWX might be a better candidate to consider a long position.
