The Insider Monkey team has completed processing the quarterly 13F filings for the June 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 Raytheon Technologies Corp (NYSE:RTX).
Raytheon Technologies Corp (NYSE:RTX) investors should pay attention to a decrease in hedge fund interest in recent months. Raytheon Technologies Corp (NYSE:RTX) was in 53 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 81. Our calculations also showed that RTX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
To most shareholders, hedge funds are viewed as worthless, old investment vehicles of years past. While there are over 8000 funds in operation at present, We choose to focus on the bigwigs of this club, around 850 funds. These money managers direct bulk of the smart money’s total capital, and by watching their unrivaled equity investments, Insider Monkey has figured out many investment strategies that have historically outpaced the market. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Charles Clough of Clough Capital Partners
At Insider Monkey, we scour multiple sources to uncover 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 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. 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. With all of this in mind we’re going to take a glance at the key hedge fund action regarding Raytheon Technologies Corp (NYSE:RTX).
Do Hedge Funds Think RTX Is A Good Stock To Buy Now?
At second quarter’s end, a total of 53 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the previous quarter. On the other hand, there were a total of 59 hedge funds with a bullish position in RTX a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Raytheon Technologies Corp (NYSE:RTX) was held by Fisher Asset Management, which reported holding $572.8 million worth of stock at the end of June. It was followed by Farallon Capital with a $405.2 million position. Other investors bullish on the company included Alkeon Capital Management, Citadel Investment Group, and Holocene Advisors. In terms of the portfolio weights assigned to each position Albar Capital allocated the biggest weight to Raytheon Technologies Corp (NYSE:RTX), around 9.94% of its 13F portfolio. Cartenna Capital is also relatively very bullish on the stock, setting aside 4.17 percent of its 13F equity portfolio to RTX.
Judging by the fact that Raytheon Technologies Corp (NYSE:RTX) has experienced declining sentiment from the smart money, logic holds that there were a few hedge funds who were dropping their positions entirely by the end of the second quarter. Interestingly, Eric W. Mandelblatt and Gaurav Kapadia’s Soroban Capital Partners dropped the biggest position of the “upper crust” of funds watched by Insider Monkey, valued at about $333.2 million in stock. Renaissance Technologies, also cut its stock, about $100 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest fell by 5 funds by the end of the second quarter.
Let’s also examine hedge fund activity in other stocks similar to Raytheon Technologies Corp (NYSE:RTX). We will take a look at The Goldman Sachs Group, Inc. (NYSE:GS), The Toronto-Dominion Bank (NYSE:TD), JD.Com Inc (NASDAQ:JD), American Tower Corporation (REIT) (NYSE:AMT), Sony Group Corp (NYSE:SONY), Target Corporation (NYSE:TGT), and Caterpillar Inc. (NYSE:CAT). This group of stocks’ market values match RTX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GS | 61 | 5183843 | -16 |
| TD | 17 | 303083 | -2 |
| JD | 76 | 10697800 | 1 |
| AMT | 55 | 4720340 | -3 |
| SONY | 20 | 409056 | -7 |
| TGT | 66 | 5865028 | 6 |
| CAT | 62 | 5264268 | 9 |
| Average | 51 | 4634774 | -1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 51 hedge funds with bullish positions and the average amount invested in these stocks was $4635 million. That figure was $2112 million in RTX’s case. JD.Com Inc (NASDAQ:JD) is the most popular stock in this table. On the other hand The Toronto-Dominion Bank (NYSE:TD) is the least popular one with only 17 bullish hedge fund positions. Raytheon Technologies Corp (NYSE:RTX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for RTX is 50.1. 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 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on RTX as the stock returned 3.2% since the end of Q2 (through 10/1) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Rtx Corp (NYSE:RTX)
Follow Rtx Corp (NYSE:RTX)
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Disclosure: None. This article was originally published at Insider Monkey.
