The Procter & Gamble Company (NYSE:PG) was in 56 hedge funds’ portfolio at the end of December. PG shareholders have witnessed an increase in hedge fund interest recently. There were 53 hedge funds in our database with PG positions at the end of the previous quarter.
To most investors, hedge funds are viewed as slow, old financial tools of yesteryear. While there are greater than 8000 funds trading at the moment, we hone in on the upper echelon of this club, close to 450 funds. Most estimates calculate that this group controls most of the hedge fund industry’s total asset base, and by watching their highest performing investments, we have uncovered a few investment strategies that have historically outstripped the market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 24 percentage points in 7 months (check out a sample of our picks).
Equally as key, bullish insider trading activity is a second way to break down the investments you’re interested in. There are lots of motivations for an upper level exec to get rid of shares of his or her company, but only one, very simple reason why they would initiate a purchase. Plenty of academic studies have demonstrated the impressive potential of this strategy if shareholders understand where to look (learn more here).
With these “truths” under our belt, it’s important to take a look at the recent action encompassing The Procter & Gamble Company (NYSE:PG).
How are hedge funds trading The Procter & Gamble Company (NYSE:PG)?
At the end of the fourth quarter, a total of 56 of the hedge funds we track were bullish in this stock, a change of 6% from one quarter earlier. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings meaningfully.
When looking at the hedgies we track, Warren Buffett’s Berkshire Hathaway had the biggest position in The Procter & Gamble Company (NYSE:PG), worth close to $3.5841 billion, accounting for 4.8% of its total 13F portfolio. The second largest stake is held by Bill Ackman of Pershing Square, with a $1.8973 billion position; 20.7% of its 13F portfolio is allocated to the company. Remaining hedgies that hold long positions include Donald Yacktman’s Yacktman Asset Management, and Ken Fisher’s Fisher Asset Management.
As aggregate interest increased, some big names have been driving this bullishness. Columbus Circle Investors, managed by Donald Chiboucis, established the largest position in The Procter & Gamble Company (NYSE:PG). Columbus Circle Investors had 138.8 million invested in the company at the end of the quarter. Ray Dalio’s Bridgewater Associates also initiated a $18.3 million position during the quarter. The following funds were also among the new PG investors: Stephen J. Errico’s Locust Wood Capital Advisers, Anand Parekh’s Alyeska Investment Group, and Eliav Assouline and Marc Andersen’s Axial Capital.
What have insiders been doing with The Procter & Gamble Company (NYSE:PG)?
Insider trading activity, especially when it’s bullish, is particularly usable when the company in focus has experienced transactions within the past half-year. Over the last half-year time period, The Procter & Gamble Company (NYSE:PG) has experienced 1 unique insiders purchasing, and 6 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to The Procter & Gamble Company (NYSE:PG). These stocks are Energizer Holdings, Inc. (NYSE:ENR), Avon Products, Inc. (NYSE:AVP), Estee Lauder Companies Inc (NYSE:EL), Kimberly Clark Corp (NYSE:KMB), and Colgate-Palmolive Company (NYSE:CL). This group of stocks belong to the personal products industry and their market caps resemble PG’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Energizer Holdings, Inc. (NYSE:ENR) | 24 | 1 | 8 |
| Avon Products, Inc. (NYSE:AVP) | 26 | 1 | 1 |
| Estee Lauder Companies Inc (NYSE:EL) | 23 | 0 | 12 |
| Kimberly Clark Corp (NYSE:KMB) | 20 | 0 | 4 |
| Colgate-Palmolive Company (NYSE:CL) | 30 | 0 | 24 |
With the returns shown by our strategies, everyday investors should always watch hedge fund and insider trading activity, and The Procter & Gamble Company (NYSE:PG) applies perfectly to this mantra.
