In this article, we discuss the Dow 30 stocks and their rank according to the 2022 hedge fund bullishness index. If you want to skip our review of these stocks and the latest market situation, go directly to 15 Dow Stocks Listed and Ranked By 2022 Hedge Fund Bullishness Index.
The Dow Jones Industrial Average, also known as the ‘Dow 30’, is one of the most widely-watched benchmark indexes that represents the overall health of the US economy. The index consists of 30 blue chip companies that boast a long track record of stable earnings, and whose performance is critically tied to that of the overall economy. The index was started in 1896 by Charles Dow and his business partner Edward Jones, and is preceded by only one index, namely the Dow Jones Transportation Average.
The price-weighted Dow Jones Industrial Average has fallen by more than 16% in the year so far, which is its biggest drop for the first six months of the year since 1962. This comes as inflation touched 40-year highs in May, and in a bid to control spiraling prices, the Federal Reserve raised interest rates by 0.75 basis points on June 15, the biggest hike since 1994. This has put immense pressure on consumer pockets and companies’ earnings alike, leaving little opportunity for gains in the current environment.
Still, hedge funds which employ the best brains in the financial world and put millions of dollars into market research are making moves in the stock market, dumping risky stocks and positioning their portfolios to weather the current storm. In our list below, which includes names such as Apple Inc. (NASDAQ:AAPL), Walmart Inc. (NYSE:WMT), and Verizon Communications Inc. (NYSE:VZ), we’ve ranked the 30 components of the Dow Jones Industrial Average according to their hedge fund sentiment.
30 stocks included in the Dow Jones Industrial Average are listed in ascending order of the number of hedge funds having stakes in each stock as of the end of the first quarter.
Insider Monkey tracks and maintains a database of 900+ elite hedge funds, and analyzes it to let our readers know what the professional hedge fund industry is feeling about a particular stock.
Dow 30 Stocks Listed and Ranked By 2022 Hedge Fund Bullishness Index
30. Travelers Companies, Inc. (NYSE:TRV)
Number of Hedge Fund Holders: 37
Travelers Companies, Inc. (NYSE:TRV) is a New York-based company which engages in the provision of property and casualty insurance, and was founded in 1853. It was downgraded to ‘Sell’ from ‘Neutral’ by Goldman Sachs analyst Alex Scott on June 6, who noted that TRV has less upside to further margin improvement and could possibly start to see its margins deteriorate as property and physical damage severity trends have an impact. He reduced the price target to $170 from $190.
Out of the 900+ elite hedge funds tracked by Insider Monkey, 37 reported ownership of positions in Travelers Companies, Inc. (NYSE:TRV) at the end of Q1 2022 with a collective price tag of $631.7 million. This shows a negative trend from the previous quarter where 40 hedge funds held stakes worth $618.5 million. With 3.1 million shares valued at $568 million, First Eagle Investment Management was the top shareholder of Travelers Companies, Inc. (NYSE:TRV) in the first quarter.
Along with Apple Inc. (NASDAQ:AAPL), Walmart Inc. (NYSE:WMT), and Verizon Communications Inc. (NYSE:VZ), Travelers Companies, Inc. (NYSE:TRV) is an interesting Dow 30 stock to watch.
29. Walgreens Boots Alliance, Inc. (NASDAQ:WBA)
Number of Hedge Fund Holders: 38
Walgreens Boots Alliance, Inc. (NASDAQ:WBA) is a pharmacy and beauty retail chain operating in the United States and internationally. It offers an impressive dividend yield of 5.07% as of July 1. The company reported on June 28 that the much-discussed $6.7 billion proposed sale of its Boots drugstore chain in the United Kingdom had been terminated amid the current uncertainty in the financial markets.
Investors were seen disposing their stakes in Walgreens Boots Alliance, Inc. (NASDAQ:WBA). At the end of March, 38 hedge funds held collective stakes in WBA worth $736.9 million. This is down from 42 hedge funds with over $1 billion in positions a quarter ago. Camber Capital Management was the leading Walgreens Boots Alliance, Inc. (NASDAQ:WBA) shareholder in the first quarter, with 2.4 million shares valued at more than $107 million.
Aristotle Capital Management talked about Walgreens Boots Alliance, Inc. (NASDAQ:WBA) in its Q1 2022 investor letter. Here is what was said:
“We first invested in Walgreens Boots Alliance in early 2013. Over our holding period, Walgreens merged with U.K.-based Boots Alliance, establishing itself as a global leading retail pharmacy chain. CEO Stefano Pessina set the company on a path of pursuing strategic partnerships (as opposed to vertical integration deals) to increase store traffic and to, over time, transform the business into a neighborhood health destination around a more modern pharmacy. Using its strong FREE cash flow generation, the company ramped up its investments in technology, aiming to accelerate the digitalization of health information. Mr. Pessina was not successful, however, at turning around the firm’s U.S. retail segment and had to deal with increasing prescription drug reimbursement pressures. He stepped down as CEO in 2020, and in 2021, Roz Brewer took the reins of the firm. We admire Ms. Brewer’s impressive track record at companies that include Starbucks (NASDAQ:SBUX) and Walmart (Sam’s Club). However, given management’s decision to divest core cash-generative businesses and redeploy capital to embryonic healthcare startups, we prefer to step aside while we follow the company’s progress.”
28. Dow Inc. (NYSE:DOW)
Number of Hedge Fund Holders: 39
Dow Inc. (NYSE:DOW) is a materials science company which deals in performance materials, coatings, industrial intermediates and infrastructure, as well as packaging and specialty plastics.
At the close of the first quarter of 2022, 39 out of the 900+ hedge funds tracked by Insider Monkey reported long bets on Dow Inc. (NYSE:DOW) shares, with aggregate positions worth $851.3 million. This showed a negative trend from the previous quarter where 43 hedge funds were bullish on DOW shares. With 6.28 million shares valued at more than $400 million, Pzena Investment Management was the biggest shareholder of Dow Inc. (NYSE:DOW) in Q1 2022.
27. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 43
International Business Machines Corporation (NYSE:IBM) is a New York-based information technology giant which was founded in 1911. It deals in the provision of computer hardware, software, IT research and financial services in over 171 countries around the world. The company pays a solid 4.67% yield as of June 30. IBM stock was given a ‘Buy’ rating by BofA analyst Wamsi Mohan in April with a $165 price target, who expects sustained revenue growth for the company beyond 2022, and noted that its defensive portfolio can outperform in a tricky economic climate.
At the end of the first quarter, 43 out of the 912 hedge funds tracked by Insider Monkey held stakes in International Business Machines Corporation (NYSE:IBM), with a combined value of $1.16 billion. This is down from 44 hedge funds a quarter earlier. Arrowstreet Capital was the largest shareholder of IBM in the first quarter, after boosting its stake in the company by 36% to come in at 4.46 million shares worth $579.9 million.
In its Q4 2021 investor letter, here is what St. James Investment Company had to say about International Business Machines Corporation (NYSE:IBM).
“IBM was not the first company to build computers. The distinction belongs to Sperry-Rand’s subsidiary UNIVAC, which introduced the first commercially successful computers in the early 1950s. In this era, IBM did possess the largest research and development department of the business machines industry and quickly caught up, introducing cost-competitive computers a few years after UNIVAC. By the late 1950s, IBM held the dominant market share in computers. IBM also touted a vastly superior sales organization, which used a sales tactic called “paper machines” (the equivalent of today’s “vaporware”). If a competitor’s product was selling well in a market segment that IBM had yet to penetrate, the company would announce a competing product and start taking orders for the “paper machine” long before it was available.
One cannot overstate how powerful IBM was in the computer industry in the 1950s and 1960s. Every competitor rightly worried that if their product worked too well for too long, it was only a matter of
time before an army of IBM salesforce representatives mobilized. In their easily recognizable uniforms of starched white shirts, red ties and blue suits, IBM marketers marched on their customers and offered a more expensive, but much more defensible, choice. “Nobody gets fired for buying IBM” was a common phrase. Even competitors acknowledged that the company excelled at sales. As a UNIVAC executive once complained, ‘It doesn’t do much good to build a better mousetrap if the other guy selling mousetraps has five times as many salesmen.’” (Click here to see the full text)
26. Honeywell International Inc. (NASDAQ:HON)
Number of Hedge Fund Holders: 50
Honeywell International Inc. (NASDAQ:HON) is a multinational conglomerate based in North Carolina, which deals in a wide range of products and services including building technologies, performance materials, aerospace, and safety and productivity solutions.
As of the end of March, 50 hedge funds held positions in Honeywell International Inc. (NASDAQ:HON) with a combined worth of $1.76 billion. In contrast, 51 hedge funds owned $1.89 billion worth of stakes on the company a quarter ago. D E Shaw held 2.13 million shares of Honeywell International Inc. (NASDAQ:HON) in the first quarter with a price tag of $415.6 million, making it the firm’s largest shareholder. Two Sigma Advisors was also a noteworthy shareholder with a $301 million position.
ClearBridge Investments talked about Honeywell International Inc. (NASDAQ:HON) in its Q1 2021 investor letter, stating:
“The portfolio’s quality bias and valuation discipline have generated compelling returns over time with typically strong relative results in more challenging environments as it did through the first three quarters of 2020. However, that same quality bias tends to create a more challenging relative performance environment for the Strategy during periods of sharp economic acceleration, which tend to benefit stocks that are more commodity linked or of lower quality. This has been the case during the vaccine- and stimulus-driven rally experienced late last year and during the most recent quarter. Sectors that lagged in the quarter included industrials, Honeywell also lagged in the quarter after previously generating strong returns over extended periods.”
25. 3M Company (NYSE:MMM)
Number of Hedge Fund Holders: 51
Based in Minnesota, 3M Company (NYSE:MMM) is a global diversified technology company which manufactures products in the fields of safety and industrials, transportation, and electronics. It is a renowned dividend payer, offering a 4.61% yield as of June 30 and boasting 63 consecutive years of dividend increases.
As of the end of Q1 2022, 51 hedge funds tracked by Insider Monkey were bullish on 3M Company (NYSE:MMM) shares, with aggregate stakes worth $1.53 billion. This shows a positive trend from the previous quarter where 41 hedge funds held $1.56 billion worth of positions in the company. Fisher Asset Management was the top shareholder of 3M Company (NYSE:MMM) in the first quarter, with a $898 million stake. Renaissance Technologies and AQR Capital Management also featured as prominent MMM shareholders.
24. The Boeing Company (NYSE:BA)
Number of Hedge Fund Holders: 52
The Boeing Company (NYSE:BA) is US-based aviation giant which has been making planes since 1916. It also develops rockets, satellites, missiles, human space flight and launch systems, as well as telecommunications equipment. The company has been facing critical supply chain problems as of late which has been affecting its airplane deliveries, and its CEO recently remarked that these issues might persist well into 2023.
A study of Insider Monkey’s database of 900+ hedge funds tracked at the end of the first quarter showed that 52 hedge funds were long The Boeing Company (NYSE:BA), with combined positions worth $1.36 billion. In contrast, 50 hedge funds were stakeholders in the company a quarter earlier. Pentwater Capital Management was the firm’s leading shareholder in the first quarter, with a $216 million stake that saw an increase of 17% over the previous quarter.
23. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 53
Chevron Corporation (NYSE:CVX) is an American energy company, and one of the largest in the world with a $293.4 billion market cap. The stock has gained 43.81% in the last 12 months as of June 28, and 25.31% in the year so far. Chevron Corporation (NYSE:CVX) recently featured in Wells Fargo’s list of top recession stock picks.
53 hedge funds were long Chevron Corporation (NYSE:CVX) at the close of the first quarter, the same as the quarter before. The total value of the Q1 hedge fund holdings was recorded at $27.99 billion. Warren Buffett’s Berkshire Hathaway recently became the largest shareholder of Chevron Corporation (NYSE:CVX), with a 317% bump in stake to stand at 159 million shares priced at $25.9 billion.
ClearBridge Investments mentioned Chevron Corporation (NYSE:CVX) in its Q1 2022 investor letter. Here is what the fund said:
“The energy sector, which led a strong market in 2021, generated even more dramatic relative performance in the quarter, advancing 39% and leading the benchmark Russell 1000 Value Index. Years of restrained investment in the energy sector, combined with a strong post-pandemic recovery, contributed to the higher commodity prices. The upward pressure escalated with the Russian invasion of Ukraine. Our energy holding Chevron (NYSE:CVX) benefited from higher commodity prices and was among the top contributors to first-quarter performance.”
22. Caterpillar Inc. (NYSE:CAT)
Number of Hedge Fund Holders: 54
Caterpillar Inc. (NYSE:CAT) stands as the world’s leading manufacturer of construction and mining equipment. The Illinois-based company also provides diesel and natural gas engines, as well as industrial gas turbines.
54 hedge funds were bullish on CAT stock at the end of the first quarter, up from 53 hedge funds in the previous quarter. The combined value of Q1 hedge fund holdings stood at upwards of $4 billion. Bill & Melinda Gates Foundation Trust held the biggest Caterpillar Inc. (NYSE:CAT) stake in the first quarter, with 7.35 million shares worth $1.63 billion.
In its Q2 2021 investor letter, investment firm Oakmark Funds discussed the market position and prospects of Caterpillar Inc. (NYSE:CAT), stating:
“Having followed the company closely for north of a decade, Caterpillar Inc. (NYSE:CAT) is a name we know well. For much of its history, the operating efficiency of the company left much to be desired, but its underlying competitive position was rarely in doubt. A series of actions over the past decade (e.g., LEAN implementation, improved service mix, optimized manufacturing footprint) helped to narrow the gap between Caterpillar’s potential and its realized results, driving material margin expansion and strong share price performance. In our view, the company remains among the highest quality industrials in the market, but its underlying business is cyclical, which can translate to large swings in both performance and investor sentiment over short time periods. Our ability to focus on the long-term, sustainable earnings power of a business (rather than getting distracted by near-term fluctuations) is our most significant edge when investing in cyclical businesses. Due to the inherent volatility in Caterpillar’s end markets and operating performance, we suspect we’ll have a future opportunity to own this high-quality business at a more attractive price once the cycle turns and today’s enthusiasm wears off.”
21. Amgen Inc. (NASDAQ:AMGN)
Number of Hedge Fund Holders: 56
Amgen Inc. (NASDAQ:AMGN) is a California-based biopharmaceutical giant which develops and markets drug therapies for a range of diseases.
A total of 56 hedge funds from the Q1 database of Insider Monkey were bullish on Amgen Inc. (NASDAQ:AMGN) shares with combined stakes worth $1.88 billion. This shows a positive trend from the previous quarter where 52 hedge funds reported long bets on AMGN shares. Two Sigma Advisors was its most prominent shareholder in the first quarter with a $418 million position.
ClearBridge Investments talked about Amgen Inc. (NASDAQ:AMGN) in its Q3 2021 investor letter. Here’s what it said:
” In health care, Amgen, a biotechnology company, has endured several pipeline setbacks recently, including a slow transition of its Lumakras treatment into first-line lung cancer, a slower than expected development of its treatment for myeloma as well as the company’s asthma treatment Tezepelumab missing its primary endpoint in a Phase III study. We remain positive on the stock, with Amgen’s investments in biosimilars and its pipeline part of our long-term thesis.”
20. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 58
McDonald’s Corporation (NYSE:MCD) is a restaurant giant with operations in more than 118 countries around the globe, making it one of the best consumer defensive stocks to buy now. Atlantic Equities on June 29 upgraded MCD stock to ‘Overweight’ from ‘Neutral’ with a $278 price target, noting that the company provides a defensive value play with its leadership in the global quick-service restaurant space and a resilient business model.
58 hedge funds were long McDonald’s Corporation (NYSE:MCD) at the close of the first quarter, up from 57 hedge funds in the previous quarter. The total value of Q1 hedge fund holdings stood at $2.73 billion. Of these, nearly $626 million worth of shares were held by Jim Simons’ Renaissance Technologies, which stood as the largest shareholder of McDonald’s Corporation (NYSE:MCD) in the first quarter.
19. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 60
Walmart Inc. (NYSE:WMT) is a retail supermarket giant based in the United States. It has offered increasing dividends for the last 48 years in a row, and its yield stands at 1.84% as of July 1.
With combined stakes worth $6.56 billion, 60 hedge funds were bullish on Walmart Inc. (NYSE:WMT) shares at the close of Q1 2022. This is down from 63 hedge funds with $7.13 billion worth of positions in the retail giant a quarter earlier. Its top Q1 shareholder was GQG Partners, with 15.4 million shares worth more than $2.2 billion, recording a 49% increase in stake over the previous quarter.
18. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 64
The Coca-Cola Company (NYSE:KO) is a Dividend King and one of the safest stocks to buy in the current economic climate. The beverage company has boosted its dividend payments for the last 59 years in a row, and offers a 2.80% yield as of July 1.
Many popular investors hold significant stakes in The Coca-Cola Company (NYSE:KO). At the end of Q1 2022, Warren Buffett’s Berkshire Hathaway owned 400 million shares of the company valued at $24.79 billion, making it the firm’s largest shareholder. Other prominent investors include GQG Partners, Bridgewater Associates, and Arrowstreet Capital, with stakes worth $801 million, $740 million and $454 million respectively. Overall, 64 hedge funds were long The Coca-Cola Company (NYSE:KO) at the end of March, down from 70 hedge funds a quarter earlier.
ClearBridge Investments talked about The Coca-Cola Company (NYSE:KO) in its Q4 2021 investor letter. Here’s what it said:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (Coca-Cola). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”
17. Cisco Systems, Inc. (NASDAQ:CSCO)
Number of Hedge Fund Holders: 66
Cisco Systems, Inc. (NASDAQ:CSCO) is an information-technology giant which provides internet-based networking and other related products. It is based in California, and boasts a $179 billion market cap.
As of the end of the first quarter, 66 hedge funds from the database of Insider Monkey owned stakes worth $1.74 billion in Cisco Systems, Inc. (NASDAQ:CSCO). This shows a positive trend from the previous quarter where 57 hedge funds were bullish on CSCO shares. With a $331 million position, AQR Capital Management was the most prominent shareholder of Cisco Systems, Inc. (NASDAQ:CSCO) in the first quarter.
Hayden Capital, an asset management firm, mentioned a few stocks in its Q1 2022 investor letter, and Cisco Systems, Inc. (NASDAQ:CSCO) was one of them. Here is what it said:
“During the height of the tech bubble, Cisco’s stock peaked at ~$80 in March 2000, reaching up to a $500BN+ valuation (~26x Price / Sales, with ~17% operating margins or 156x operating profits). However, by the time it bottomed in September 2002, shares were trading at just ~$8.60 per share (~3.2x Price / Sales, ~21x operating profits). A little over a year later, the share price had doubled to ~$20, but then continued to trade around those levels in a range for the next 10 years.
So why were Amazon and Mercado Libre able to recover so quickly from their large draw-downs, while Cisco’s stock price remained anemic?
It seems the answer is in their differing growth profiles in the years afterwards. For example, Cisco Systems, Inc. (NASDAQ:CSCO) revenues were $18.9BN in 2000, $22.3BN in 2001, $18.9BN in 2002, $18.9BN in 2003, and $22.0BN in 2004. By contrast, Amazon was able to grow its business by ~120% in the 3 years after the stock bottomed, and Mercado Libre grew by ~118% in the following 3 years. For Cisco Systems, Inc. (NASDAQ:CSCO), it wasn’t until 2012 (11 years later) that revenues managed to double (to $46BN) from its original peak. Compare this to Amazon, who during those same 11 years, managed to grow its business 22x.”
16. NIKE, Inc. (NYSE:NKE)
Number of Hedge Fund Holders: 67
NIKE, Inc. (NYSE:NKE) is an American manufacturer of athletic goods, and one of the most identifiable brands in the world. It was given a ‘Buy’ rating by Stifel analyst Jim Duffy on June 6, who backed the firm to meet its multi-year growth targets despite headwinds from supply chain issues in China.
Of all the hedge funds tracked by Insider Monkey, Fundsmith LLP was the leading Q1 shareholder of NIKE, Inc. (NYSE:NKE), with 6.7 million shares valued at more than $905 million. In total, 67 hedge funds reported bullish bets on the athletic goods company, with combined investments worth $3.98 billion. This is down from 68 hedge funds a quarter ago.
Clearbridge Investments highlighted a few stocks in its Q4 2021 investor letter, and NIKE, Inc. (NYSE:NKE) was one of them. Here is what the fund said:
“NIKE, Inc. (NYSE:NKE) is another play on e-commerce as well as the anticipated growth in consumer spending as we learn to live with COVID-19. After selling out of the stock in 2016 due to competitive concerns, we were motivated to repurchase shares because of optimism around a new management team’s focus on accelerating Nike’s shift toward e-commerce and direct-to-consumer (DTC) distribution. Near-term supply chain issues in Vietnam and retail weakness in China that we see as ephemeral provided a good buying opportunity. We do not believe the market is giving proper credit to Nike’s potential to deliver attractive, high-single-digit revenue growth while delivering operating margin expansion as more merchandise is sold direct. NIKE, Inc. (NYSE:NKE) is also still under indexed to the women’s category, which we see as a significant ongoing catalyst.”
Click to continue reading and see 15 Dow Stocks Listed and Ranked By 2022 Hedge Fund Bullishness Index.
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Disclosure. None. Dow 30 Stocks Listed and Ranked By 2022 Hedge Fund Bullishness Index is originally published on Insider Monkey.