Is Diageo plc (ADR) (DEO) A Good Stock To Buy?

Judging by the fact that Diageo plc (ADR) (NYSE:DEO) has gone through a decline in interest from hedge fund managers, we can see that there was a specific group of fund managers who sold off their full holdings by the end of the third quarter. Interestingly, Ken Griffin’s Citadel Investment Group cashed in the biggest position of all the hedgies watched by Insider Monkey, valued at an estimated $5.8 million in call options, and Andre F. Perold’s HighVista Strategies was right behind this move, as the fund said goodbye to about $4.8 million worth of shares.

Let’s go over hedge fund activity in other stocks similar to Diageo plc (ADR) (NYSE:DEO). We will take a look at Reynolds American, Inc. (NYSE:RAI), Celgene Corporation (NASDAQ:CELG), AstraZeneca plc (ADR) (NYSE:AZN), and Lockheed Martin Corporation (NYSE:LMT). This group of stocks’ market values match DEO’s market value.

As you can see these stocks had an average of 42 funds with bullish positions and the average amount invested in these stocks was $1.27 billion. That figure was $1.1 billion in DEO’s case. Celgene Corporation (NASDAQ:CELG) is the most popular stock in this table with 67 funds holding shares. On the other hand AstraZeneca plc (ADR) (NYSE:AZN) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks Diageo plc (ADR) (NYSE:DEO) is even less popular than AstraZeneca plc (ADR) (NYSE:AZN). Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.

Disclosure: None