We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. We at Insider Monkey have gone over 835 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article, we look at what those funds think of The Boeing Company (NYSE:BA) based on that data.
The Boeing Company (NYSE:BA) has seen a decrease in enthusiasm from smart money recently. Our calculations also showed that BA raked 29th among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings).
According to most traders, hedge funds are assumed to be underperforming, outdated investment vehicles of years past. While there are more than 8000 funds trading at the moment, Our researchers look at the top tier of this club, around 850 funds. These money managers command the lion’s share of the smart money’s total asset base, and by tracking their best stock picks, Insider Monkey has figured out various investment strategies that have historically exceeded Mr. Market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 35.3% since February 2017 (through March 3rd) even though the market was up more than 35% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Larry Robbins of Glenview Capital
We leave no stone unturned when looking for the next great investment idea. For example, this trader is claiming triple digit returns, so we check out his latest trade recommendations We are probably at the peak of the COVID-19 pandemic, so we check out this biotech investor’s coronavirus picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences (by the way watch this video if you want to hear one of the best healthcare hedge fund manager’s coronavirus analysis). Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to take a look at the new hedge fund action encompassing The Boeing Company (NYSE:BA).
Hedge fund activity in The Boeing Company (NYSE:BA)
At the end of the fourth quarter, a total of 82 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -1% from one quarter earlier. By comparison, 67 hedge funds held shares or bullish call options in BA a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Ken Griffin’s Citadel Investment Group has the most valuable call position in The Boeing Company (NYSE:BA), worth close to $651.7 million, corresponding to 0.3% of its total 13F portfolio. The second largest stake is held by Ken Griffin of Citadel Investment Group, with a $318.5 million position; 0.1% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors that hold long positions consist of Andrew Immerman and Jeremy Schiffman’s Palestra Capital Management, Phill Gross and Robert Atchinson’s Adage Capital Management and Panayotis Takis Sparaggis’s Alkeon Capital Management. In terms of the portfolio weights assigned to each position Hengistbury Investment Partners allocated the biggest weight to The Boeing Company (NYSE:BA), around 14.74% of its 13F portfolio. Mountaineer Partners Management is also relatively very bullish on the stock, earmarking 7.8 percent of its 13F equity portfolio to BA.
Because The Boeing Company (NYSE:BA) has witnessed a decline in interest from the smart money, it’s easy to see that there exists a select few money managers that decided to sell off their positions entirely last quarter. Intriguingly, Andreas Halvorsen’s Viking Global said goodbye to the biggest investment of all the hedgies followed by Insider Monkey, valued at about $854.8 million in stock. John Smith Clark’s fund, Southpoint Capital Advisors, also sold off its stock, about $152.2 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as The Boeing Company (NYSE:BA) but similarly valued. We will take a look at Citigroup Inc. (NYSE:C), China Mobile Limited (NYSE:CHL), Oracle Corporation (NASDAQ:ORCL), and SAP AG (NYSE:SAP). All of these stocks’ market caps are closest to BA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| C | 98 | 11733711 | -3 |
| CHL | 12 | 386065 | 0 |
| ORCL | 59 | 3719807 | 3 |
| SAP | 16 | 1763846 | -4 |
| Average | 46.25 | 4400857 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 46.25 hedge funds with bullish positions and the average amount invested in these stocks was $4401 million. That figure was $2856 million in BA’s case. Citigroup Inc. (NYSE:C) is the most popular stock in this table. On the other hand China Mobile Limited (NYSE:CHL) is the least popular one with only 12 bullish hedge fund positions. The Boeing Company (NYSE:BA) 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 1.0% in 2020 through April 20th but beat the market by 11 percentage points. Unfortunately BA wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on BA were disappointed as the stock returned -55.7% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
