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Becton, Dickinson and Company (BDX): Are Hedge Funds Right About This Stock?

Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.

Is Becton, Dickinson and Company (NYSE:BDX) going to take off soon? The smart money is turning bullish. The number of bullish hedge fund bets rose by 7 recently. Our calculations also showed that BDX isn’t among the 30 most popular stocks among hedge funds. BDX was in 41 hedge funds’ portfolios at the end of the third quarter of 2018. There were 34 hedge funds in our database with BDX positions at the end of the previous quarter.

Today there are many formulas shareholders use to assess stocks. Two of the most innovative formulas are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the elite fund managers can beat the market by a very impressive margin (see the details here).

William Von Mueffling - Cantillon Capital Management

We’re going to check out the recent hedge fund action regarding Becton, Dickinson and Company (NYSE:BDX).

What have hedge funds been doing with Becton, Dickinson and Company (NYSE:BDX)?

At Q3’s end, a total of 41 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 21% from the second quarter of 2018. On the other hand, there were a total of 52 hedge funds with a bullish position in BDX at the beginning of this year. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

No of Hedge Funds with BDX Positions

According to Insider Monkey’s hedge fund database, William von Mueffling’s Cantillon Capital Management has the most valuable position in Becton, Dickinson and Company (NYSE:BDX), worth close to $272.1 million, accounting for 3.1% of its total 13F portfolio. The second largest stake is held by Cantillon Capital Management, led by William von Mueffling, holding a $272.1 million position; 3.1% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism include David Blood and Al Gore’s Generation Investment Management, John Brennan’s Sirios Capital Management and Phill Gross and Robert Atchinson’s Adage Capital Management.

As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Gotham Asset Management, managed by Joel Greenblatt, created the largest position in Becton, Dickinson and Company (NYSE:BDX). Gotham Asset Management had $27.2 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also initiated a $23.3 million position during the quarter. The other funds with new positions in the stock are John Overdeck and David Siegel’s Two Sigma Advisors, Israel Englander’s Millennium Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s also examine hedge fund activity in other stocks similar to Becton, Dickinson and Company (NYSE:BDX). We will take a look at The TJX Companies, Inc. (NYSE:TJX), Eni SpA (NYSE:E), Westpac Banking Corporation (NYSE:WBK), and The Kraft Heinz Company (NASDAQ:KHC). This group of stocks’ market values are closest to BDX’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
TJX 49 3254193 10
E 7 72126 0
WBK 6 41825 -1
KHC 37 19059495 10
Average 24.75 5606910 4.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $5.61 billion. That figure was $1.25 billion in BDX’s case. The TJX Companies, Inc. (NYSE:TJX) is the most popular stock in this table. On the other hand Westpac Banking Corporation (NYSE:WBK) is the least popular one with only 6 bullish hedge fund positions. Becton, Dickinson and Company (NYSE:BDX) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TJX might be a better candidate to consider a long position.

Disclosure: None. This article was originally published at Insider Monkey.

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