After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Starbucks Corporation (NASDAQ:SBUX).
Starbucks Corporation (NASDAQ:SBUX) was in 63 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 68. SBUX investors should be aware of an increase in support from the world’s most elite money managers lately. There were 61 hedge funds in our database with SBUX holdings at the end of March. Our calculations also showed that SBUX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
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. Now let’s view the recent hedge fund action regarding Starbucks Corporation (NASDAQ:SBUX).
Do Hedge Funds Think SBUX Is A Good Stock To Buy Now?
At Q2’s end, a total of 63 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards SBUX over the last 24 quarters. With hedge funds’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
Among these funds, Fundsmith LLP held the most valuable stake in Starbucks Corporation (NASDAQ:SBUX), which was worth $1201.5 million at the end of the second quarter. On the second spot was Fisher Asset Management which amassed $890.1 million worth of shares. Cedar Rock Capital, Citadel Investment Group, and Duquesne Capital 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 Pacifica Capital Investments allocated the biggest weight to Starbucks Corporation (NASDAQ:SBUX), around 14.62% of its 13F portfolio. Cedar Rock Capital is also relatively very bullish on the stock, designating 13.69 percent of its 13F equity portfolio to SBUX.
Consequently, specific money managers were leading the bulls’ herd. Incline Global Management, managed by Jeff Lignelli, established the biggest position in Starbucks Corporation (NASDAQ:SBUX). Incline Global Management had $46.9 million invested in the company at the end of the quarter. Steven Boyd’s Armistice Capital also initiated a $26.8 million position during the quarter. The following funds were also among the new SBUX investors: Dmitry Balyasny’s Balyasny Asset Management, David Costen Haley’s HBK Investments, and Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital.
Let’s check out hedge fund activity in other stocks similar to Starbucks Corporation (NASDAQ:SBUX). These stocks are Sanofi (NYSE:SNY), International Business Machines Corp. (NYSE:IBM), Applied Materials, Inc. (NASDAQ:AMAT), Raytheon Technologies Corp (NYSE:RTX), Goldman Sachs Group, Inc. (NYSE:GS), Toronto-Dominion Bank (NYSE:TD), and JD.Com Inc (NASDAQ:JD). This group of stocks’ market values match SBUX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SNY | 16 | 1261299 | 1 |
| IBM | 41 | 1373521 | 0 |
| AMAT | 73 | 4594094 | -5 |
| RTX | 53 | 2112283 | -5 |
| GS | 61 | 5183843 | -16 |
| TD | 17 | 303083 | -2 |
| JD | 76 | 10697800 | 1 |
| Average | 48.1 | 3646560 | -3.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 48.1 hedge funds with bullish positions and the average amount invested in these stocks was $3647 million. That figure was $4758 million in SBUX’s case. JD.Com Inc (NASDAQ:JD) is the most popular stock in this table. On the other hand Sanofi (NYSE:SNY) is the least popular one with only 16 bullish hedge fund positions. Starbucks Corporation (NASDAQ:SBUX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SBUX is 74. 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 SBUX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SBUX were disappointed as the stock returned -4.8% 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.
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Disclosure: None. This article was originally published at Insider Monkey.
