Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Is Johnson Controls, Inc. (JCI) A Good Stock To Buy?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track more than 700 prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile gigantic failures like hedge funds’ recent losses in Valeant. Let’s take a closer look at what the funds we track think about Johnson Controls, Inc. (NYSE:JCI) in this article.

Is Johnson Controls, Inc. (NYSE:JCI) a bargain? The smart money is taking a pessimistic view. The number of bullish hedge fund bets dropped by 9 recently. At the end of this article we will also compare JCI to other stocks including DISH Network Corp. (NASDAQ:DISH), Banco Bradesco SA (ADR) (NYSE:BBD), and Imperial Oil Limited (USA) (NYSEAMEX:IMO) to get a better sense of its popularity.

Follow Johnson Controls Inc (NYSE:JCI)
Trade (NYSE:JCI) Now!

Now, we’re going to go over the new action surrounding Johnson Controls, Inc. (NYSE:JCI).

How are hedge funds trading Johnson Controls, Inc. (NYSE:JCI)?

Heading into Q4, a total of 32 of the hedge funds tracked by Insider Monkey were bullish in this stock, a change of -22% from the second quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

According to publicly available hedge fund holdings data compiled by Insider Monkey, Edinburgh Partners, managed by Sandy Nairn, holds the most valuable position in Johnson Controls, Inc. (NYSE:JCI). Edinburgh Partners has a $78.5 million position in the stock, comprising 8.3% of its 13F portfolio. The second most bullish hedge fund manager is D E Shaw, managed by D. E. Shaw, which held a $62.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that hold long positions contain Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, John Overdeck and David Siegel’s Two Sigma Advisors and Cliff Asness’s AQR Capital Management.

Judging by the fact that Johnson Controls, Inc. (NYSE:JCI) has witnessed falling interest from the entirety of the hedge funds we track, logic holds that there exists a select few funds who were dropping their positions entirely last quarter. Interestingly, Barry Rosenstein’s JANA Partners sold off the largest stake of the “upper crust” of funds monitored by Insider Monkey, worth an estimated $497.1 million in stock. Doug Gordon, Jon Hilsabeck and Don Jabro’s fund, Shellback Capital, also dropped its stock, about $13.8 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 9 funds last quarter.

Let’s check out hedge fund activity in other stocks similar to Johnson Controls, Inc. (NYSE:JCI). We will take a look at DISH Network Corp. (NASDAQ:DISH), Banco Bradesco SA (ADR) (NYSE:BBD), Imperial Oil Limited (USA) (NYSEAMEX:IMO), and Humana Inc (NYSE:HUM). This group of stocks’ market values are closest to JCI’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DISH 53 3089941 -15
BBD 11 146176 -4
IMO 9 76127 -2
HUM 56 4290176 -28

As you can see these stocks had an average of 32.25 hedge funds with bullish positions and the average amount invested in these stocks was $1,901 million.That figure was $478 millions in JCI’s case. Humana Inc (NYSE:HUM) is the most popular stock in this table. On the other hand Imperial Oil Limited (USA) (NYSEAMEX:IMO) is the least popular one with only 9 bullish hedge fund positions. Johnson Controls, Inc. (NYSE:JCI) 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 HUM might be a better candidate to consider a long position.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!