Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active 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 failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Bristol Myers Squibb Company (NYSE:BMY) in this article.
Is Bristol Myers Squibb Company (NYSE:BMY) a buy right now? The best stock pickers were reducing their bets on the stock. The number of long hedge fund bets dropped by 8 recently. Bristol Myers Squibb Company (NYSE:BMY) was in 73 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 136. Our calculations also showed that BMY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 81 hedge funds in our database with BMY holdings at the end of March.
If you’d ask most market participants, hedge funds are perceived as worthless, outdated investment tools of years past. While there are over 8000 funds trading at the moment, We choose to focus on the top tier of this club, about 850 funds. These money managers handle the majority of all hedge funds’ total asset base, and by following their first-class investments, Insider Monkey has discovered numerous investment strategies that have historically defeated the market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website .
Andreas Halvorsen of Viking Global
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to take a look at the key hedge fund action encompassing Bristol Myers Squibb Company (NYSE:BMY).
Do Hedge Funds Think BMY Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 73 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards BMY over the last 24 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Berkshire Hathaway was the largest shareholder of Bristol Myers Squibb Company (NYSE:BMY), with a stake worth $1757 million reported as of the end of June. Trailing Berkshire Hathaway was Viking Global, which amassed a stake valued at $756.3 million. Renaissance Technologies, OrbiMed Advisors, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Birchview Capital allocated the biggest weight to Bristol Myers Squibb Company (NYSE:BMY), around 31.82% of its 13F portfolio. HealthInvest Partners AB is also relatively very bullish on the stock, dishing out 9.31 percent of its 13F equity portfolio to BMY.
Seeing as Bristol Myers Squibb Company (NYSE:BMY) has faced falling interest from hedge fund managers, we can see that there exists a select few funds that decided to sell off their full holdings heading into Q3. Interestingly, Prashanth Jayaram’s Tri Locum Partners dropped the biggest investment of the 750 funds followed by Insider Monkey, comprising an estimated $24.7 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also cut its stock, about $20.8 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 8 funds heading into Q3.
Let’s now take a look at hedge fund activity in other stocks similar to Bristol Myers Squibb Company (NYSE:BMY). We will take a look at Charter Communications, Inc. (NASDAQ:CHTR), Citigroup Inc. (NYSE:C), Union Pacific Corporation (NYSE:UNP), Royal Bank of Canada (NYSE:RY), Sea Limited (NYSE:SE), NextEra Energy, Inc. (NYSE:NEE), and Anheuser-Busch InBev SA/NV (NYSE:BUD). This group of stocks’ market values resemble BMY’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CHTR | 75 | 19486659 | 1 |
| C | 87 | 6155245 | -3 |
| UNP | 69 | 5034926 | -6 |
| RY | 18 | 905415 | 0 |
| SE | 104 | 12209916 | 6 |
| NEE | 59 | 2686533 | -4 |
| BUD | 18 | 1234449 | 0 |
| Average | 61.4 | 6816163 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 61.4 hedge funds with bullish positions and the average amount invested in these stocks was $6816 million. That figure was $5203 million in BMY’s case. Sea Limited (NYSE:SE) is the most popular stock in this table. On the other hand Royal Bank of Canada (NYSE:RY) is the least popular one with only 18 bullish hedge fund positions. Bristol Myers Squibb Company (NYSE:BMY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BMY is 45.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24.1% in 2021 through September 20th and beat the market again by 6.9 percentage points. Unfortunately BMY wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BMY were disappointed as the stock returned -8.8% since the end of June (through 9/20) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Bristol Myers Squibb Co (NYSE:BMY)
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Disclosure: None. This article was originally published at Insider Monkey.
