The SEC requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings discloses the funds’ positions on September 30. We at Insider Monkey have compiled an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Johnson & Johnson (NYSE:JNJ) based on those filings.
Hedge fund interest towards Johnson & Johnson (NYSE:JNJ) was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare JNJ to other stocks including Facebook Inc (NASDAQ:FB), General Electric Company (NYSE:GE), and AT&T Inc. (NYSE:T) to get a better sense of its popularity.
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At the moment there are tons of methods shareholders can use to analyze stocks. A couple of the most useful methods are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the elite money managers can outpace their index-focused peers by a very impressive margin (see the details here).
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With all of this in mind, let’s take a glance at the key action regarding Johnson & Johnson (NYSE:JNJ).
What does the smart money think about Johnson & Johnson (NYSE:JNJ)?
At the end of the third quarter, a total of 82 of the hedge funds tracked by Insider Monkey were long this stock, unchanged over the quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Ken Fisher’s Fisher Asset Management has the biggest position in Johnson & Johnson (NYSE:JNJ), worth close to $1.28 billion, amounting to 2.3% of its total 13F portfolio. Sitting at the No. 2 spot is Yacktman Asset Management, led by Donald Yacktman, holding a $725.8 million position; the fund has 6.3% of its 13F portfolio invested in the stock. Remaining peers that hold long positions comprise Cliff Asness’s AQR Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Jim Simons’ Renaissance Technologies.
In addition, it’s worth mentioning that Jean-Marie Eveillard’s First Eagle Investment Management sold off the largest investment of the 700 funds tracked by Insider Monkey, valued at close to $92.2 million in ‘call’ options., and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dropped about $84.4 million worth of shares. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Johnson & Johnson (NYSE:JNJ). We will take a look at Facebook Inc (NASDAQ:FB), General Electric Company (NYSE:GE), AT&T Inc. (NYSE:T), and Wells Fargo & Co (NYSE:WFC). This group of stocks’ market caps resemble JNJ’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FB | 149 | 16275572 | 1 |
| GE | 55 | 5080463 | -2 |
| T | 51 | 2546244 | -4 |
| WFC | 104 | 27422982 | 16 |
As you can see these stocks had an average of 90 hedge funds with bullish positions and the average amount invested in these stocks was $12.83 billion. That figure was $5.15 billion in JNJ’s case. Facebook Inc (NASDAQ:FB) is the most popular stock in this table. On the other hand AT&T Inc. (NYSE:T) is the least popular one with only 51 bullish hedge fund positions. Johnson & Johnson (NYSE:JNJ) 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, Facebook might be a better candidate to consider a long position.
