Hedge funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is SAP AG (ADR) (NYSE:SAP), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is SAP AG (ADR) (NYSE:SAP) a buy at the moment? The best stock pickers are indeed selling. The number of long hedge fund positions that are disclosed in regulatory 13F filings shrank by 2 recently. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as BP plc (ADR) (NYSE:BP), Schlumberger Limited. (NYSE:SLB), and Kraft Heinz Co (NASDAQ:KHC) to gather more data points.
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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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What does the smart money think about SAP AG (ADR) (NYSE:SAP)?
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a 22% drop from the previous quarter. On the other hand, there were a total of 8 hedge funds with a bullish position in SAP at the beginning of this year, which has also dipped by 1 in 2016. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Fisher Asset Management, led by Ken Fisher, holds the largest position in SAP AG (ADR) (NYSE:SAP). Fisher Asset Management has a $564 million position in the stock, comprising 1% of its 13F portfolio. Sitting at the No. 2 spot is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $250.5 million position. Other members of the smart money that are bullish include William B. Gray’s Orbis Investment Management, and Matthew Hulsizer’s PEAK6 Capital Management. We should note that Orbis Investment Management is among our list of the 100 best performing hedge funds, which is based on the performance of their 13F long positions in non-micro-cap stocks.
Judging by the fact that SAP AG (ADR) (NYSE:SAP) has weathered declining sentiment from the entirety of the hedge funds we track, logic holds that there exists a select few hedge funds that decided to sell off their positions entirely last quarter. Interestingly, Renaissance Technologies, one of the largest hedge funds in the world, cut the biggest stake of the 700 funds tracked by Insider Monkey, valued at close to $25.2 million in stock. Ken Griffin’s fund, Citadel Investment Group, also sold off its stock, about $9.3 million worth.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as SAP AG (ADR) (NYSE:SAP) but similarly valued. These stocks are BP plc (ADR) (NYSE:BP), Schlumberger Limited. (NYSE:SLB), Kraft Heinz Co (NASDAQ:KHC), and Novo Nordisk A/S (ADR) (NYSE:NVO). All of these stocks’ market caps are closest to SAP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BP | 30 | 1064994 | -10 |
| SLB | 59 | 1564821 | 4 |
| KHC | 52 | 31239057 | -8 |
| NVO | 15 | 1249389 | 3 |
As you can see these stocks had an average of 39 hedge funds with bullish positions and the average amount invested in these stocks was $8.78 billion. That figure was $845 million in SAP’s case. Schlumberger Limited. (NYSE:SLB) is the most popular stock in this table. On the other hand Novo Nordisk A/S (ADR) (NYSE:NVO) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks SAP AG (ADR) (NYSE:SAP) is even less popular than NVO. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock.
Disclosure: None
