In this article you are going to find out whether hedge funds think Pfizer Inc. (NYSE:PFE) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Pfizer Inc. (NYSE:PFE) was in 74 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 119. PFE investors should be aware of an increase in activity from the world’s largest hedge funds of late. There were 67 hedge funds in our database with PFE holdings at the end of June. Our calculations also showed that PFE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind let’s review the recent hedge fund action regarding Pfizer Inc. (NYSE:PFE).
Cathie Wood of ARK Investment Management
Do Hedge Funds Think PFE Is A Good Stock To Buy Now?
At third quarter’s end, a total of 74 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the second quarter of 2021. By comparison, 66 hedge funds held shares or bullish call options in PFE a year ago. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
The largest stake in Pfizer Inc. (NYSE:PFE) was held by Renaissance Technologies, which reported holding $320.8 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $251.2 million position. Other investors bullish on the company included Adage Capital Management, AQR Capital Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Copernicus Capital Management allocated the biggest weight to Pfizer Inc. (NYSE:PFE), around 15.61% of its 13F portfolio. Caxton Associates LP is also relatively very bullish on the stock, dishing out 7.03 percent of its 13F equity portfolio to PFE.
As one would reasonably expect, key money managers were leading the bulls’ herd. Adage Capital Management, managed by Phill Gross and Robert Atchinson, assembled the most valuable position in Pfizer Inc. (NYSE:PFE). Adage Capital Management had $247.7 million invested in the company at the end of the quarter. Catherine D. Wood’s ARK Investment Management also initiated a $95.4 million position during the quarter. The other funds with brand new PFE positions are Bruce Kovner’s Caxton Associates LP, Doron Breen and Mori Arkin’s Sphera Global Healthcare Fund, and Farallon Capital.
Let’s also examine hedge fund activity in other stocks similar to Pfizer Inc. (NYSE:PFE). We will take a look at Oracle Corporation (NYSE:ORCL), NIKE, Inc. (NYSE:NKE), Cisco Systems, Inc. (NASDAQ:CSCO), The Coca-Cola Company (NYSE:KO), Thermo Fisher Scientific Inc. (NYSE:TMO), Verizon Communications Inc. (NYSE:VZ), and Eli Lilly and Company (NYSE:LLY). This group of stocks’ market values resemble PFE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ORCL | 56 | 3473487 | 1 |
| NKE | 70 | 5682126 | 3 |
| CSCO | 63 | 3937668 | 3 |
| KO | 61 | 25137199 | -1 |
| TMO | 94 | 8210112 | 7 |
| VZ | 57 | 10359205 | -6 |
| LLY | 62 | 4287033 | -2 |
| Average | 66.1 | 8726690 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 66.1 hedge funds with bullish positions and the average amount invested in these stocks was $8727 million. That figure was $2663 million in PFE’s case. Thermo Fisher Scientific Inc. (NYSE:TMO) is the most popular stock in this table. On the other hand Oracle Corporation (NYSE:ORCL) is the least popular one with only 56 bullish hedge fund positions. Pfizer Inc. (NYSE:PFE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PFE is 52.3. 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. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on PFE as the stock returned 26% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
