Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is AbbVie Inc (NYSE:ABBV), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
AbbVie Inc (NYSE:ABBV) investors should be aware of an increase in support from the world’s most elite money managers recently. AbbVie Inc (NYSE:ABBV) was in 82 hedge funds’ portfolios at the end of June. The all time high for this statistic is 89. Our calculations also showed that ABBV isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
John Overdeck of Two Sigma Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, the demand for helium is soaring and there is a helium supply shortage, so we are checking out stock pitches like this emerging helium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s take a peek at the key hedge fund action surrounding AbbVie Inc (NYSE:ABBV).
Do Hedge Funds Think ABBV Is A Good Stock To Buy Now?
At second quarter’s end, a total of 82 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ABBV over the last 24 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in AbbVie Inc (NYSE:ABBV) was held by Berkshire Hathaway, which reported holding $2312.3 million worth of stock at the end of June. It was followed by Orbis Investment Management with a $747.1 million position. Other investors bullish on the company included Two Sigma Advisors, Diamond Hill Capital, and Adage Capital Management. In terms of the portfolio weights assigned to each position HealthInvest Partners AB allocated the biggest weight to AbbVie Inc (NYSE:ABBV), around 9.07% of its 13F portfolio. Iron Triangle Partners is also relatively very bullish on the stock, setting aside 6.18 percent of its 13F equity portfolio to ABBV.
As aggregate interest increased, some big names have been driving this bullishness. Masters Capital Management, managed by Mike Masters, initiated the most outsized call position in AbbVie Inc (NYSE:ABBV). Masters Capital Management had $112.6 million invested in the company at the end of the quarter. Zach Schreiber’s Point State Capital also initiated a $16.9 million position during the quarter. The other funds with new positions in the stock are Chris Rokos’s Rokos Capital Management, Andrew Weiss’s Weiss Asset Management, and Efrem Kamen’s Pura Vida Investments.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as AbbVie Inc (NYSE:ABBV) but similarly valued. We will take a look at Thermo Fisher Scientific Inc. (NYSE:TMO), Merck & Co., Inc. (NYSE:MRK), Broadcom Inc (NASDAQ:AVGO), Novo Nordisk A/S (NYSE:NVO), Danaher Corporation (NYSE:DHR), Wells Fargo & Company (NYSE:WFC), and Accenture Plc (NYSE:ACN). All of these stocks’ market caps match ABBV’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TMO | 87 | 7391464 | 8 |
| MRK | 79 | 5296278 | 0 |
| AVGO | 47 | 3031104 | -6 |
| NVO | 20 | 3561818 | -3 |
| DHR | 78 | 6414646 | -3 |
| WFC | 94 | 7083950 | -2 |
| ACN | 52 | 3151789 | 4 |
| Average | 65.3 | 5133007 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 65.3 hedge funds with bullish positions and the average amount invested in these stocks was $5133 million. That figure was $5351 million in ABBV’s case. Wells Fargo & Company (NYSE:WFC) is the most popular stock in this table. On the other hand Novo Nordisk A/S (NYSE:NVO) is the least popular one with only 20 bullish hedge fund positions. AbbVie Inc (NYSE:ABBV) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ABBV is 79.5. 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. 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 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 26.3% in 2021 through October 29th and beat the market again by 2.3 percentage points. Unfortunately ABBV wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ABBV were disappointed as the stock returned 4.2% since the end of June (through 10/29) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Abbvie Inc. (NYSE:ABBV)
Follow Abbvie Inc. (NYSE:ABBV)
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Disclosure: None. This article was originally published at Insider Monkey.
