In this article we will take a look at whether hedge funds think Abbott Laboratories (NYSE:ABT) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is Abbott Laboratories (NYSE:ABT) a healthy stock for your portfolio? The best stock pickers were taking a bullish view. The number of long hedge fund bets went up by 5 recently. Abbott Laboratories (NYSE:ABT) was in 67 hedge funds’ portfolios at the end of June. The all time high for this statistics is 65. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ABT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most market participants, hedge funds are assumed to be unimportant, outdated financial vehicles of years past. While there are greater than 8000 funds trading at present, We look at the upper echelon of this group, approximately 850 funds. These investment experts have their hands on the majority of all hedge funds’ total capital, and by keeping track of their inimitable investments, Insider Monkey has brought to light many investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 34% since February 2017 (through August 17th) even though the market was up 53% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Ken Griffin of Citadel Investment Group
At Insider Monkey we scour multiple sources to uncover the next great investment idea. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than quadrupled this year. We are trying to identify other EV revolution winners, so we are checking out this under-the-radar lithium stock. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. With all of this in mind let’s take a glance at the recent hedge fund action surrounding Abbott Laboratories (NYSE:ABT).
How have hedgies been trading Abbott Laboratories (NYSE:ABT)?
At second quarter’s end, a total of 67 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from the previous quarter. On the other hand, there were a total of 47 hedge funds with a bullish position in ABT a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
The largest stake in Abbott Laboratories (NYSE:ABT) was held by GQG Partners, which reported holding $1146.2 million worth of stock at the end of September. It was followed by Fisher Asset Management with a $631.3 million position. Other investors bullish on the company included Diamond Hill Capital, Adage Capital Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Blue Pool Capital allocated the biggest weight to Abbott Laboratories (NYSE:ABT), around 5.88% of its 13F portfolio. GQG Partners is also relatively very bullish on the stock, earmarking 5.17 percent of its 13F equity portfolio to ABT.
As aggregate interest increased, some big names have jumped into Abbott Laboratories (NYSE:ABT) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, created the largest position in Abbott Laboratories (NYSE:ABT). Balyasny Asset Management had $75.8 million invested in the company at the end of the quarter. Arthur B Cohen and Joseph Healey’s Healthcor Management LP also made a $58.3 million investment in the stock during the quarter. The following funds were also among the new ABT investors: Renaissance Technologies, Anand Parekh’s Alyeska Investment Group, and Alexander West’s Blue Pool Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Abbott Laboratories (NYSE:ABT) but similarly valued. These stocks are Eli Lilly and Company (NYSE:LLY), ASML Holding N.V. (NASDAQ:ASML), Novo Nordisk A/S (NYSE:NVO), NIKE, Inc. (NYSE:NKE), The Unilever Group (NYSE:UL), Thermo Fisher Scientific Inc. (NYSE:TMO), and AstraZeneca plc (NASDAQ:AZN). This group of stocks’ market valuations are closest to ABT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LLY | 51 | 2161323 | 8 |
| ASML | 25 | 1961320 | -5 |
| NVO | 24 | 3294368 | 0 |
| NKE | 71 | 2603242 | -9 |
| UL | 13 | 149078 | 0 |
| TMO | 73 | 4525711 | -7 |
| AZN | 38 | 1920506 | 12 |
| Average | 42.1 | 2373650 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 42.1 hedge funds with bullish positions and the average amount invested in these stocks was $2374 million. That figure was $3504 million in ABT’s case. Thermo Fisher Scientific Inc. (NYSE:TMO) is the most popular stock in this table. On the other hand The Unilever Group (NYSE:UL) is the least popular one with only 13 bullish hedge fund positions. Abbott Laboratories (NYSE:ABT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ABT is 85. 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 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 gained 29.2% in 2020 through October 16th and still beat the market by 19.7 percentage points. Hedge funds were also right about betting on ABT as the stock returned 20.8% since the end of Q2 (through 10/16) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Abbott Laboratories (NYSE:ABT)
Follow Abbott Laboratories (NYSE:ABT)
Disclosure: None. This article was originally published at Insider Monkey.
