Does Walgreens Boots Alliance Inc (NASDAQ:WBA) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund sentiment towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail unconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.
When it comes to Walgreens Boots Alliance Inc (NASDAQ:WBA), it looks like money managers are turning less bullish, as the number of funds tracked by Insider Monkey long the stock slid by seven during the third quarter. In this way, Walgreens was included in the portfolios of 60 funds at the end of September. At the end of this article we will also compare WBA to other stocks including Honeywell International Inc. (NYSE:HON), Royal Bank of Canada (USA) (NYSE:RY), and Ambev SA (ADR) (NYSE:ABEV) to get a better sense of its popularity.
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Follow Walgreens Boots Alliance Inc. (NASDAQ:WBA)
If you’d ask most market participants, hedge funds are viewed as slow, old financial tools of years past. While there are more than 8000 funds with their doors open today, We hone in on the aristocrats of this club, approximately 700 funds. These money managers handle most of the smart money’s total capital, and by watching their unrivaled stock picks, Insider Monkey has unsheathed various investment strategies that have historically outpaced Mr. Market. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points annually for a decade in their back tests.
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Keeping this in mind, let’s take a gander at the key action encompassing Walgreens Boots Alliance Inc (NASDAQ:WBA).
What does the smart money think about Walgreens Boots Alliance Inc (NASDAQ:WBA)?
As stated earlier, 60 of the hedge funds tracked by Insider Monkey held long positions in Walgreens Booots Alliance at the end of September, down by 10% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Eric W. Mandelblatt’s Soroban Capital Partners has the number one position in Walgreens Boots Alliance Inc (NASDAQ:WBA), worth close to $371.6 million, amounting to 2.3% of its total 13F portfolio. The second largest stake is held by Bill & Melinda Gates Foundation Trust, managed by Michael Larson, holding a $280.2 million position; the fund has 1.5% of its 13F portfolio invested in the stock. Other peers that are bullish comprise Michael Lowenstein’s Kensico Capital, Jonathon Jacobson’s Highfields Capital Management and Tom Gayner’s Markel Gayner Asset Management.
Seeing as Walgreens Boots Alliance Inc (NASDAQ:WBA) has experienced falling interest from the smart money, it’s safe to say that there was a specific group of hedgies who were dropping their full holdings last quarter. Interestingly, Barry Rosenstein’s JANA Partners dumped the biggest investment of the “upper crust” of funds watched by Insider Monkey, valued at about $381.3 million in call options.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Walgreens Boots Alliance Inc (NASDAQ:WBA) but similarly valued. These stocks are Honeywell International Inc. (NYSE:HON), Royal Bank of Canada (USA) (NYSE:RY), Ambev SA (ADR) (NYSE:ABEV), and China Petroleum & Chemical Corp (ADR) (NYSE:SNP). This group of stocks’ market values are similar to WBA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HON | 48 | 1612992 | 0 |
| RY | 17 | 455517 | 0 |
| ABEV | 17 | 422804 | -4 |
| SNP | 11 | 41406 | 2 |
As you can see these stocks had an average of 23 hedge funds with bullish positions and the average amount invested in these stocks was $633 million. That figure was $3.13 billion in WBA’s case. Honeywell International Inc. (NYSE:HON) is the most popular stock in this table with 48 funds holding shares as of the end of the third quarter. On the other hand China Petroleum & Chemical Corp (ADR) (NYSE:SNP) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Walgreens Boots Alliance Inc (NASDAQ:WBA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
