The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Walmart Inc. (NYSE:WMT).
Walmart Inc. (NYSE:WMT) was in 71 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 71. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. WMT has experienced an increase in hedge fund interest lately. There were 58 hedge funds in our database with WMT positions at the end of the first quarter. Our calculations also showed that WMT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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. Keeping this in mind we’re going to take a gander at the new hedge fund action surrounding Walmart Inc. (NYSE:WMT).
Do Hedge Funds Think WMT Is A Good Stock To Buy Now?
At the end of June, a total of 71 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards WMT over the last 24 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
The largest stake in Walmart Inc. (NYSE:WMT) was held by Fisher Asset Management, which reported holding $1780.5 million worth of stock at the end of June. It was followed by Bill & Melinda Gates Foundation Trust with a $1071.9 million position. Other investors bullish on the company included Arrowstreet Capital, D E Shaw, and Bridgewater Associates. In terms of the portfolio weights assigned to each position Empirical Capital Partners allocated the biggest weight to Walmart Inc. (NYSE:WMT), around 9.8% of its 13F portfolio. Pittencrieff Partners – Gabalex Capital is also relatively very bullish on the stock, setting aside 6.97 percent of its 13F equity portfolio to WMT.
As aggregate interest increased, some big names have jumped into Walmart Inc. (NYSE:WMT) headfirst. Holocene Advisors, managed by Brandon Haley, established the largest position in Walmart Inc. (NYSE:WMT). Holocene Advisors had $77.2 million invested in the company at the end of the quarter. Joseph Samuels’s Islet Management also initiated a $70.5 million position during the quarter. The following funds were also among the new WMT investors: Gregg Moskowitz’s Interval Partners, Michael Burry’s Scion Asset Management, and Anthony Joseph Vaccarino’s North Fourth Asset Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Walmart Inc. (NYSE:WMT) but similarly valued. These stocks are UnitedHealth Group Inc. (NYSE:UNH), Mastercard Incorporated (NYSE:MA), Bank of America Corporation (NYSE:BAC), Paypal Holdings Inc (NASDAQ:PYPL), The Home Depot, Inc. (NYSE:HD), The Procter & Gamble Company (NYSE:PG), and The Walt Disney Company (NYSE:DIS). All of these stocks’ market caps are similar to WMT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UNH | 105 | 13124871 | 16 |
| MA | 156 | 17098818 | 5 |
| BAC | 87 | 46536945 | -10 |
| PYPL | 143 | 16352523 | 0 |
| HD | 64 | 4177204 | -4 |
| PG | 68 | 6934291 | -2 |
| DIS | 112 | 10830152 | -22 |
| Average | 105 | 16436401 | -2.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 105 hedge funds with bullish positions and the average amount invested in these stocks was $16436 million. That figure was $8048 million in WMT’s case. Mastercard Incorporated (NYSE:MA) is the most popular stock in this table. On the other hand The Home Depot, Inc. (NYSE:HD) is the least popular one with only 64 bullish hedge fund positions. Walmart Inc. (NYSE:WMT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for WMT is 43.8. 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 26.3% in 2021 through October 29th and still beat the market by 2.3 percentage points. A small number of hedge funds were also right about betting on WMT as the stock returned 6.3% since the end of the second quarter (through 10/29) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
