Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Marsh & McLennan Companies, Inc. (NYSE:MMC) based on that data.
Marsh & McLennan Companies, Inc. (NYSE:MMC) was in 41 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 43. MMC has experienced an increase in support from the world’s most elite money managers recently. There were 37 hedge funds in our database with MMC holdings at the end of March. Our calculations also showed that MMC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are tons of gauges market participants can use to assess stocks. A couple of the best gauges are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the top investment managers can outclass the market by a significant amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Ole Andreas Halvorsen of Viking Global
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Do Hedge Funds Think MMC Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 41 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in MMC over the last 24 quarters. With the smart money’s sentiment swirling, there exists a few key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
Among these funds, Berkshire Hathaway held the most valuable stake in Marsh & McLennan Companies, Inc. (NYSE:MMC), which was worth $590.4 million at the end of the second quarter. On the second spot was Diamond Hill Capital which amassed $315.8 million worth of shares. Viking Global, Arrowstreet Capital, and Polar 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 3G Sahana Capital Management allocated the biggest weight to Marsh & McLennan Companies, Inc. (NYSE:MMC), around 10.48% of its 13F portfolio. Bishop Rock Capital is also relatively very bullish on the stock, setting aside 4.66 percent of its 13F equity portfolio to MMC.
Consequently, specific money managers were leading the bulls’ herd. Senator Investment Group, managed by Doug Silverman and Alexander Klabin, assembled the biggest position in Marsh & McLennan Companies, Inc. (NYSE:MMC). Senator Investment Group had $118.2 million invested in the company at the end of the quarter. David Costen Haley’s HBK Investments also made a $28.1 million investment in the stock during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Sander Gerber’s Hudson Bay Capital Management, and Steve Cohen’s Point72 Asset Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Marsh & McLennan Companies, Inc. (NYSE:MMC) but similarly valued. We will take a look at Chubb Limited (NYSE:CB), Baidu, Inc. (NASDAQ:BIDU), Westpac Banking Corporation (NYSE:WBK), Fiserv, Inc. (NASDAQ:FISV), Becton, Dickinson and Company (NYSE:BDX), Illinois Tool Works Inc. (NYSE:ITW), and Capital One Financial Corp. (NYSE:COF). All of these stocks’ market caps match MMC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CB | 42 | 1737776 | 1 |
| BIDU | 59 | 3474215 | -30 |
| WBK | 4 | 38055 | 1 |
| FISV | 72 | 2655395 | -3 |
| BDX | 52 | 3335441 | -13 |
| ITW | 45 | 657608 | 12 |
| COF | 64 | 4053972 | 5 |
| Average | 48.3 | 2278923 | -3.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 48.3 hedge funds with bullish positions and the average amount invested in these stocks was $2279 million. That figure was $2537 million in MMC’s case. Fiserv, Inc. (NASDAQ:FISV) is the most popular stock in this table. On the other hand Westpac Banking Corporation (NYSE:WBK) is the least popular one with only 4 bullish hedge fund positions. Marsh & McLennan Companies, Inc. (NYSE:MMC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MMC is 64.8. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. A small number of hedge funds were also right about betting on MMC as the stock returned 12.3% since the end of the second quarter (through 10/11) and outperformed the market by an even larger margin.
Follow Marsh & Mclennan Companies Inc. (NYSE:MMC)
Follow Marsh & Mclennan Companies Inc. (NYSE:MMC)
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Disclosure: None. This article was originally published at Insider Monkey.
