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 Walgreens Boots Alliance Inc (NASDAQ:WBA) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Walgreens Boots Alliance Inc (NASDAQ:WBA) was in 37 hedge funds’ portfolios at the end of September. The all time high for this statistic is 91. WBA investors should be aware of a decrease in support from the world’s most elite money managers in recent months. There were 41 hedge funds in our database with WBA positions at the end of the second quarter. Our calculations also showed that WBA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
John Rogers of Ariel Investments
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. Keeping this in mind let’s analyze the key hedge fund action surrounding Walgreens Boots Alliance Inc (NASDAQ:WBA).
Do Hedge Funds Think WBA Is A Good Stock To Buy Now?
At Q3’s end, a total of 37 of the hedge funds tracked by Insider Monkey were long this stock, a change of -10% from the previous quarter. The graph below displays the number of hedge funds with bullish position in WBA over the last 25 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Camber Capital Management was the largest shareholder of Walgreens Boots Alliance Inc (NASDAQ:WBA), with a stake worth $188.2 million reported as of the end of September. Trailing Camber Capital Management was Antipodes Partners, which amassed a stake valued at $125.5 million. Ariel Investments, Arrowstreet Capital, and Two Sigma Advisors 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 Tri Locum Partners allocated the biggest weight to Walgreens Boots Alliance Inc (NASDAQ:WBA), around 6.54% of its 13F portfolio. Tri Locum Partners is also relatively very bullish on the stock, dishing out 5.85 percent of its 13F equity portfolio to WBA.
Due to the fact that Walgreens Boots Alliance Inc (NASDAQ:WBA) has faced falling interest from the aggregate hedge fund industry, logic holds that there was a specific group of hedge funds that decided to sell off their entire stakes last quarter. It’s worth mentioning that Larry Robbins’s Glenview Capital dropped the largest investment of the “upper crust” of funds followed by Insider Monkey, comprising an estimated $120.9 million in stock, and Andreas Halvorsen’s Viking Global was right behind this move, as the fund said goodbye to about $114.1 million worth. These transactions are intriguing to say the least, as total hedge fund interest was cut by 4 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Walgreens Boots Alliance Inc (NASDAQ:WBA). These stocks are Pioneer Natural Resources Company (NYSE:PXD), American Electric Power Company, Inc. (NYSE:AEP), Prudential Financial Inc (NYSE:PRU), Koninklijke Philips NV (NYSE:PHG), Paychex, Inc. (NASDAQ:PAYX), Electronic Arts Inc. (NASDAQ:EA), and Constellation Brands, Inc. (NYSE:STZ). This group of stocks’ market values match WBA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PXD | 48 | 958649 | 3 |
| AEP | 36 | 751595 | 7 |
| PRU | 33 | 460021 | 5 |
| PHG | 11 | 79466 | 1 |
| PAYX | 34 | 1115089 | 5 |
| EA | 53 | 1097032 | -3 |
| STZ | 53 | 1719109 | 3 |
| Average | 38.3 | 882994 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.3 hedge funds with bullish positions and the average amount invested in these stocks was $883 million. That figure was $850 million in WBA’s case. Electronic Arts Inc. (NASDAQ:EA) is the most popular stock in this table. On the other hand Koninklijke Philips NV (NYSE:PHG) is the least popular one with only 11 bullish hedge fund positions. Walgreens Boots Alliance Inc (NASDAQ:WBA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WBA is 44.2. 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 beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on WBA as the stock returned 6.8% since the end of the third quarter (through 1/31) and outperformed the market by an even larger margin.
Follow Walgreens Boots Alliance Inc. (NASDAQ:WBA)
Follow Walgreens Boots Alliance Inc. (NASDAQ:WBA)
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Disclosure: None. This article was originally published at Insider Monkey.
