The latest 13F reporting period has come and gone, and 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, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought NIKE, Inc. (NYSE:NKE) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
NIKE, Inc. (NYSE:NKE) has experienced an increase in activity from the world’s largest hedge funds lately. NIKE, Inc. (NYSE:NKE) was in 70 hedge funds’ portfolios at the end of September. The all time high for this statistic is 82. There were 67 hedge funds in our database with NKE holdings at the end of June. Our calculations also showed that NKE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Jim Simons of Renaissance Technologies
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. With all of this in mind we’re going to take a glance at the fresh hedge fund action regarding NIKE, Inc. (NYSE:NKE).
Do Hedge Funds Think NKE Is A Good Stock To Buy Now?
At the end of September, a total of 70 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the second quarter of 2021. On the other hand, there were a total of 75 hedge funds with a bullish position in NKE a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Fundsmith LLP was the largest shareholder of NIKE, Inc. (NYSE:NKE), with a stake worth $1272.9 million reported as of the end of September. Trailing Fundsmith LLP was Fisher Asset Management, which amassed a stake valued at $1138.5 million. GuardCap Asset Management, Renaissance Technologies, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Broad Peak Investment Holdings allocated the biggest weight to NIKE, Inc. (NYSE:NKE), around 15.6% of its 13F portfolio. GuardCap Asset Management is also relatively very bullish on the stock, designating 7.34 percent of its 13F equity portfolio to NKE.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Holocene Advisors, managed by Brandon Haley, initiated the most outsized position in NIKE, Inc. (NYSE:NKE). Holocene Advisors had $81.5 million invested in the company at the end of the quarter. Edmond M. Safra’s EMS Capital also initiated a $58.1 million position during the quarter. The following funds were also among the new NKE investors: Zach Schreiber’s Point State Capital, Gabriel Plotkin’s Melvin Capital Management, and Gregg Moskowitz’s Interval Partners.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as NIKE, Inc. (NYSE:NKE) but similarly valued. These stocks are Cisco Systems, Inc. (NASDAQ:CSCO), The Coca-Cola Company (NYSE:KO), Thermo Fisher Scientific Inc. (NYSE:TMO), Verizon Communications Inc. (NYSE:VZ), Eli Lilly and Company (NYSE:LLY), Novo Nordisk A/S (NYSE:NVO), and Danaher Corporation (NYSE:DHR). This group of stocks’ market values are closest to NKE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CSCO | 63 | 3937668 | 3 |
| KO | 61 | 25137199 | -1 |
| TMO | 94 | 8210112 | 7 |
| VZ | 57 | 10359205 | -6 |
| LLY | 62 | 4287033 | -2 |
| NVO | 27 | 4053265 | 7 |
| DHR | 74 | 6946837 | -4 |
| Average | 62.6 | 8990188 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 62.6 hedge funds with bullish positions and the average amount invested in these stocks was $8990 million. That figure was $5682 million in NKE’s case. Thermo Fisher Scientific Inc. (NYSE:TMO) 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 27 bullish hedge fund positions. NIKE, Inc. (NYSE:NKE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NKE is 65.7. 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 managed to beat the market by another 3.6 percentage points. Hedge funds were somewhat right about betting on NKE as the stock returned 2.1% since the end of September (through January 31st) and outperformed the top 5 hedge fund stocks but not the market. This is a rare phenomenon as top hedge fund stocks usually beat the market over the long-term.
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Disclosure: None. This article was originally published at Insider Monkey.
