The elite funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Pfizer Inc. (NYSE:PFE) from the perspective of those elite funds.
Is Pfizer Inc. (NYSE:PFE) worth your attention right now? The smart money is taking a bearish view, as the number of bullish hedge fund bets fell by 11 between July and September. Pfizer was in 83 hedge funds’ portfolios at the end of September. At the end of this article we will also compare PFE to other stocks including Anheuser-Busch InBev NV (ADR) (NYSE:BUD), Royal Dutch Shell plc (ADR) (NYSE:RDS), and Chevron Corporation (NYSE:CVX) to get a better sense of its popularity.
Follow Pfizer Inc (NYSE:PFE)
Follow Pfizer Inc (NYSE:PFE)
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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Now, we’re going to take a look at the key action surrounding Pfizer Inc. (NYSE:PFE).
How have hedgies been trading Pfizer Inc. (NYSE:PFE)?
As stated earlier, there were 83 funds tracked by Insider Monkey long Pfizer, down by 12% from the end of June. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Ken Fisher’s Fisher Asset Management has the biggest position in Pfizer Inc. (NYSE:PFE), worth close to $1.08 billion, accounting for 1.9% of its total 13F portfolio. Sitting at the No. 2 spot is Maverick Capital, managed by Lee Ainslie, which holds a $724.1 million position; the fund has 8.6% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish encompass Ric Dillon’s Diamond Hill Capital, Cliff Asness’s AQR Capital Management and Jim Simons’ Renaissance Technologies.
Seeing as Pfizer Inc. (NYSE:PFE) has faced declining sentiment from the smart money, logic holds that there lies a certain “tier” of hedgies that decided to sell off their entire stakes heading into the fourth quarter. It’s worth mentioning that Ken Griffin’s Citadel Investment Group dropped the biggest position of the 700 funds tracked by Insider Monkey, valued at an estimated $93.5 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also cut its stock, about $57.8 million worth.
Let’s check out hedge fund activity in other stocks similar to Pfizer Inc. (NYSE:PFE). These stocks are Anheuser-Busch InBev NV (ADR) (NYSE:BUD), Royal Dutch Shell plc (ADR) (NYSE:RDS), Chevron Corporation (NYSE:CVX), and Alibaba Group Holding Ltd (NYSE:BABA). This group of stocks’ market valuations match PFE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BUD | 32 | 5851359 | -3 |
| RDS | 34 | 955466 | -3 |
| CVX | 53 | 2240908 | 6 |
| BABA | 104 | 8267577 | 35 |
As you can see these stocks had an average of 56 funds with bullish positions at the end of September and the average amount invested in these stocks was $4.33 billion. That figure was $5.50 billion in Pfizer’s case. Alibaba Group Holding Ltd (NYSE:BABA) is the most popular stock in this table. On the other hand Anheuser-Busch InBev NV (ADR) (NYSE:BUD) is the least popular one with only 32 bullish hedge fund positions. Pfizer Inc. (NYSE:PFE) 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 Alibaba might be a better candidate to consider a long position.
