The elite funds run by legendary investors such as Dan Loeb and David Tepper make hundreds of millions of dollars for themselves and their investors by spending enormous resources doing research on small cap stocks that big investment banks don’t follow. Because of their pay structures, they have strong incentive to do the research necessary to beat the market. That’s why we pay close attention to what they think in small cap stocks. In this article, we take a closer look at Sanofi SA (ADR) (NYSE:SNY) from the perspective of those elite funds.
Is Sanofi SA (ADR) (NYSE:SNY) a splendid investment now? Money managers are in a slightly bearish mood as the number of bullish hedge fund positions retreated by 1 in recent months. At the end of this article we will also compare SNY to other stocks, including Philip Morris International Inc. (NYSE:PM), Unilever N.V. (ADR) (NYSE:UN), and Unilever plc (ADR) (NYSE:UL) to get a better sense of its popularity.
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In the eyes of most shareholders, hedge funds are viewed as unimportant, old financial vehicles of yesteryear. While there are more than 8000 funds trading at the moment, Our experts look at the aristocrats of this group, around 700 funds. These investment experts oversee most of the smart money’s total capital, and by tracking their unrivaled equity investments, Insider Monkey has deciphered various investment strategies that have historically defeated the broader indices. Insider Monkey’s small-cap hedge fund strategy outrun the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Keeping this in mind, we’re going to take a peek at the fresh action surrounding Sanofi SA (ADR) (NYSE:SNY).
How are hedge funds trading Sanofi SA (ADR) (NYSE:SNY)?
Heading into Q4, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Fisher’s Fisher Asset Management has the most valuable position in Sanofi SA (ADR) (NYSE:SNY), worth close to $631.2 million, amounting to 1.3% of its total 13F portfolio. The second most bullish fund manager is Berkshire Hathaway, led by Warren Buffett, holding a $185.4 million position; the fund has 0.1% of its 13F portfolio invested in the stock. The remaining members of the smart money with similar optimism consist of Paul Orlin and Alex Porter’s Amici Capital, Ryan Heslop and Ariel Warszawski’s Firefly Value Partners and Francis Chou’s Chou Associates Management.
Judging by the fact that Sanofi SA (ADR) (NYSE:SNY) has experienced a weakening in popularity among hedge fund managers, we can see that there were a few funds who were dropping their full holdings heading into Q4. It’s worth mentioning that Clifford Fox’s Columbus Circle Investors said goodbye to the largest stake of the 700 funds followed by Insider Monkey, comprising an estimated $25.4 million in stock. Michael Messner’s fund, Seminole Capital (Investment Mgmt), also dumped its holding, about $16.3 million worth. On the other hand, Peter Rathjens, Bruce Clarke, and John Campbell’s Arrowstreet Capital and Michael Castor’s Sio Capital initiated the largest stakes in the third quarter, valued at around $9.8 million and $6.2 million, respectively.
Let’s go over hedge fund activity in other stocks similar to Sanofi SA (ADR) (NYSE:SNY). These stocks are Philip Morris International Inc. (NYSE:PM), Unilever N.V. (ADR) (NYSE:UN), Unilever plc (ADR) (NYSE:UL), and UnitedHealth Group Inc. (NYSE:UNH). This group of stocks’ market valuations match SNY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PM | 42 | 3128982 | 1 |
| UN | 13 | 1075944 | -2 |
| UL | 13 | 262749 | 3 |
| UNH | 51 | 2823923 | -10 |
As you can see, these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $1.82 billion. In Sanofi, hedge funds have amassed stakes with a total value of $971 million. UnitedHealth Group Inc. (NYSE:UNH) is the most popular stock in this table with 51 long positions, while Unilever N.V. (ADR) (NYSE:UN) is the least popular one. Sanofi SA (ADR) (NYSE:SNY) is not the most popular stock in this group but hedge fund interest is still above average. With this in mind, we think that Sanofi may be a good investment, but a more detailed analysis is required to assess the performance of the company.
