The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Raytheon Technologies Corp (NYSE:RTX) and determine whether the smart money was really smart about this stock.
Raytheon Technologies Corp (NYSE:RTX) has experienced a decrease in hedge fund sentiment recently. Raytheon Technologies Corp (NYSE:RTX) was in 48 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 81. There were 53 hedge funds in our database with RTX holdings at the end of June. Our calculations also showed that RTX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s take a gander at the recent hedge fund action regarding Raytheon Technologies Corp (NYSE:RTX).
Israel Englander of Millennium Management
Do Hedge Funds Think RTX Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 48 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the second quarter of 2021. By comparison, 55 hedge funds held shares or bullish call options in RTX a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
The largest stake in Raytheon Technologies Corp (NYSE:RTX) was held by Fisher Asset Management, which reported holding $616.2 million worth of stock at the end of September. It was followed by Farallon Capital with a $448.3 million position. Other investors bullish on the company included Alkeon Capital Management, Millennium Management, and Balyasny Asset Management. In terms of the portfolio weights assigned to each position Albar Capital allocated the biggest weight to Raytheon Technologies Corp (NYSE:RTX), around 8.21% of its 13F portfolio. MD Sass is also relatively very bullish on the stock, earmarking 6.1 percent of its 13F equity portfolio to RTX.
Judging by the fact that Raytheon Technologies Corp (NYSE:RTX) has witnessed falling interest from hedge fund managers, it’s easy to see that there was a specific group of funds that elected to cut their entire stakes in the third quarter. At the top of the heap, Jeffrey Tannenbaum’s Fir Tree dropped the largest stake of the “upper crust” of funds followed by Insider Monkey, comprising close to $17.1 million in stock. Peter Avellone’s fund, Cartenna Capital, also said goodbye to its stock, about $14.6 million worth. These transactions are important to note, as aggregate hedge fund interest was cut by 5 funds in the third quarter.
Let’s go over hedge fund activity in other stocks similar to Raytheon Technologies Corp (NYSE:RTX). These stocks are The Boeing Company (NYSE:BA), Union Pacific Corporation (NYSE:UNP), BlackRock, Inc. (NYSE:BLK), The Goldman Sachs Group, Inc. (NYSE:GS), TotalEnergies SE (NYSE:TTE), Advanced Micro Devices, Inc. (NASDAQ:AMD), and International Business Machines Corp. (NYSE:IBM). This group of stocks’ market caps resemble RTX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BA | 50 | 1431242 | -9 |
| UNP | 63 | 4886422 | -6 |
| BLK | 44 | 1085328 | -3 |
| GS | 74 | 5451988 | 13 |
| TTE | 16 | 1398818 | 1 |
| AMD | 65 | 5254017 | 2 |
| IBM | 41 | 1405372 | 0 |
| Average | 50.4 | 2987598 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 50.4 hedge funds with bullish positions and the average amount invested in these stocks was $2988 million. That figure was $2259 million in RTX’s case. The Goldman Sachs Group, Inc. (NYSE:GS) is the most popular stock in this table. On the other hand TotalEnergies SE (NYSE:TTE) is the least popular one with only 16 bullish hedge fund positions. Raytheon Technologies Corp (NYSE:RTX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RTX is 45.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on RTX as the stock returned 5.5% since the end of the third quarter (through 1/31) and outperformed the market by an even larger margin.
Follow Rtx Corp (NYSE:RTX)
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Disclosure: None. This article was originally published at Insider Monkey.
