Diageo plc (ADR) (DEO): Are Hedge Funds Right About This Stock?

Judging by the fact that Diageo plc (ADR) (NYSE:DEO) has witnessed a declination in interest from the aggregate hedge fund industry, it’s easy to see that there is a sect of funds who were dropping their full holdings by the end of the third quarter. Intriguingly, Michael Doheny’s Freshford Capital Management cut the biggest stake of the “upper crust” of funds followed by Insider Monkey, worth about $16.4 million in stock, and D E Shaw was right behind this move, as the fund said goodbye to about $3.4 million worth of shares. These transactions are interesting, as aggregate hedge fund interest was cut by 1 fund by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Diageo plc (ADR) (NYSE:DEO). These stocks are Honeywell International Inc. (NYSE:HON), American International Group Inc (NYSE:AIG), Toronto-Dominion Bank (USA) (NYSE:TD), and China Petroleum & Chemical Corp (ADR) (NYSE:SNP). This group of stocks’ market values matches Diageo plc (ADR) (NYSE:DEO)’s market value.

As you can see, these stocks had an average of 41 hedge funds with bullish positions and the average amount invested in these stocks was $2.52 billion. That figure was $1.15 billion in Diageo plc (ADR) (NYSE:DEO)’s case. American International Group Inc (NYSE:AIG) is the most popular stock in this table. On the other hand, China Petroleum & Chemical Corp (ADR) (NYSE:SNP) is the least popular one with only 7 bullish hedge fund positions. Diageo plc (ADR) (NYSE:DEO) 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, American International Group Inc (NYSE:AIG) might be a better candidate to consider a long position.