At Insider Monkey, we pore over the filings of nearly 873 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of June 30th. In this article, we will use that wealth of knowledge to determine whether or not The Coca-Cola Company (NYSE:KO) makes for a good investment right now.
The Coca-Cola Company (NYSE:KO) has experienced an increase in enthusiasm from smart money in recent months. The Coca-Cola Company (NYSE:KO) was in 62 hedge funds’ portfolios at the end of June. The all time high for this statistic is 62. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that KO isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Donald Yacktman of Yacktman Asset Management
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Do Hedge Funds Think KO Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 62 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 2% from one quarter earlier. By comparison, 59 hedge funds held shares or bullish call options in KO a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Berkshire Hathaway was the largest shareholder of The Coca-Cola Company (NYSE:KO), with a stake worth $21644 million reported as of the end of June. Trailing Berkshire Hathaway was D E Shaw, which amassed a stake valued at $481.5 million. Arrowstreet Capital, Bridgewater Associates, and Yacktman Asset Management 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 RIT Capital Partners allocated the biggest weight to The Coca-Cola Company (NYSE:KO), around 13.32% of its 13F portfolio. Berkshire Hathaway is also relatively very bullish on the stock, earmarking 7.39 percent of its 13F equity portfolio to KO.
Now, key hedge funds were leading the bulls’ herd. Alkeon Capital Management, managed by Panayotis Takis Sparaggis, assembled the most valuable call position in The Coca-Cola Company (NYSE:KO). Alkeon Capital Management had $54.1 million invested in the company at the end of the quarter. Andrew Weiss’s Weiss Asset Management also made a $11.2 million investment in the stock during the quarter. The other funds with brand new KO positions are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Michael Gelband’s ExodusPoint Capital, and Qing Li’s Sciencast Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as The Coca-Cola Company (NYSE:KO) but similarly valued. We will take a look at Verizon Communications Inc. (NYSE:VZ), Intel Corporation (NASDAQ:INTC), salesforce.com, inc. (NYSE:CRM), Cisco Systems, Inc. (NASDAQ:CSCO), Eli Lilly and Company (NYSE:LLY), Pfizer Inc. (NYSE:PFE), and Oracle Corporation (NASDAQ:ORCL). This group of stocks’ market caps resemble KO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VZ | 63 | 10958091 | -6 |
| INTC | 78 | 6764047 | -5 |
| CRM | 108 | 11767293 | 17 |
| CSCO | 60 | 4219112 | 1 |
| LLY | 64 | 2994849 | 9 |
| PFE | 67 | 2356906 | 2 |
| ORCL | 55 | 2889687 | 3 |
| Average | 70.7 | 5992855 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 70.7 hedge funds with bullish positions and the average amount invested in these stocks was $5993 million. That figure was $24966 million in KO’s case. salesforce.com, inc. (NYSE:CRM) is the most popular stock in this table. On the other hand Oracle Corporation (NASDAQ:ORCL) is the least popular one with only 55 bullish hedge fund positions. The Coca-Cola Company (NYSE:KO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KO is 42.6. 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 negative signal and 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 surpassed the market again by 2.3 percentage points. Unfortunately KO wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); KO investors were disappointed as the stock returned 5% 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 most of these stocks already outperformed the market in 2021.
Follow Coca Cola Co (NYSE:KO)
Follow Coca Cola Co (NYSE:KO)
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Disclosure: None. This article was originally published at Insider Monkey.
