What Do Hedge Funds Think of 3M Co (MMM)?

At Insider Monkey we follow around 730 of the best-performing investors and even though many of them lost money in the last several months, the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.

3M Co (NYSE:MMM) investors should be aware of an increase in support from the world’s most elite money managers in recent months. MMM was in 42 hedge funds’ portfolios at the end of the third quarter of 2015. There were 40 hedge funds in our database with MMM holdings at the end of the previous quarter. At the end of this article we will also compare MMM to other stocks including United Parcel Service, Inc. (NYSE:UPS), Schlumberger Limited. (NYSE:SLB), and Kraft Heinz Co (NASDAQ:KHC) to get a better sense of its popularity.

With all of this in mind, we’re going to take a glance at the new action encompassing 3M Co (NYSE:MMM).

What have hedge funds been doing with 3M Co (NYSE:MMM)?

Heading into Q4, a total of 42 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Greenhaven Associates, managed by Edgar Wachenheim, holds the number one position in 3M Co (NYSE:MMM). Greenhaven Associates has a $319.1 million position in the stock, comprising 6.4% of its 13F portfolio. Coming in second is AQR Capital Management, managed by Cliff Asness, which holds a $131.1 million position; 0.3% of its 13F portfolio is allocated to the stock. Other peers with similar optimism encompass John Overdeck and David Siegel’s Two Sigma Advisors, David Harding’s Winton Capital Management and Dmitry Balyasny’s Balyasny Asset Management.

With a general bullishness amongst the heavyweights, specific money managers were leading the bulls’ herd. Balyasny Asset Management, managed by Dmitry Balyasny, established the most valuable position in 3M Co (NYSE:MMM). Balyasny Asset Management had $79 million invested in the company at the end of the quarter. Nick Niell’s Arrowgrass Capital Partners also initiated a $2.2 million position during the quarter. The other funds with brand new MMM positions are Noam Gottesman’s GLG Partners, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Let’s now review hedge fund activity in other stocks similar to 3M Co (NYSE:MMM). We will take a look at United Parcel Service, Inc. (NYSE:UPS), Schlumberger Limited. (NYSE:SLB), Kraft Heinz Co (NASDAQ:KHC), and Celgene Corporation (NASDAQ:CELG). This group of stocks’ market valuations are closest to MMM’s market valuation.

As you can see these stocks had an average of 54.75 hedge funds with bullish positions and the average amount invested in these stocks was $8,273 million. That figure was $1,907 million in MMM’s case. Celgene Corporation (NASDAQ:CELG) is the most popular stock in this table. On the other hand United Parcel Service, Inc. (NYSE:UPS) is the least popular one with only 40 bullish hedge fund positions. 3M Co (NYSE:MMM) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard CELG might be a better candidate to consider a long position.