Hedge Funds Aren’t Done Buying Bristol Myers Squibb Company (BMY)

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Bristol Myers Squibb Company (NYSE:BMY).

Is Bristol Myers Squibb Company (NYSE:BMY) going to take off soon? The best stock pickers are taking a bullish view. The number of bullish hedge fund positions went up by 4 in recent months. Our calculations also showed that BMY is among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). BMY was in 126 hedge funds’ portfolios at the end of the first quarter of 2020. There were 122 hedge funds in our database with BMY holdings at the end of the previous quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

In the 21st century investor’s toolkit there are tons of signals investors put to use to analyze stocks. Some of the most useful signals are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can beat their index-focused peers by a superb margin (see the details here).


Cliff Asness of AQR Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s go over the recent hedge fund action regarding Bristol Myers Squibb Company (NYSE:BMY).

How are hedge funds trading Bristol Myers Squibb Company (NYSE:BMY)?

At the end of the first quarter, a total of 126 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from the previous quarter. The graph below displays the number of hedge funds with bullish position in BMY over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is BMY A Good Stock To Buy?

Of the funds tracked by Insider Monkey, Jim Simons (founder)’s Renaissance Technologies has the biggest position in Bristol Myers Squibb Company (NYSE:BMY), worth close to $3.6784 billion, amounting to 3.6% of its total 13F portfolio. On Renaissance Technologies’s heels is Cliff Asness of AQR Capital Management, with a $223.2 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions consist of Matthew Halbower’s Pentwater Capital Management, Benjamin A. Smith’s Laurion Capital Management and Benjamin A. Smith’s Laurion Capital Management. In terms of the portfolio weights assigned to each position Birchview Capital allocated the biggest weight to Bristol Myers Squibb Company (NYSE:BMY), around 38.85% of its 13F portfolio. Copernicus Capital Management is also relatively very bullish on the stock, designating 11.94 percent of its 13F equity portfolio to BMY.

With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Laurion Capital Management, managed by Benjamin A. Smith, initiated the most valuable position in Bristol Myers Squibb Company (NYSE:BMY). Laurion Capital Management had $175.7 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $123 million investment in the stock during the quarter. The following funds were also among the new BMY investors: Doron Breen and Mori Arkin’s Sphera Global Healthcare Fund, Henrik Rhenman’s Rhenman & Partners Asset Management, and Aaron Cowen’s Suvretta Capital Management.

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 Costco Wholesale Corporation (NASDAQ:COST), McDonald’s Corporation (NYSE:MCD), Medtronic plc (NYSE:MDT), and Amgen, Inc. (NASDAQ:AMGN). This group of stocks’ market values are similar to BMY’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
COST 68 4351741 -2
MCD 66 953580 9
MDT 59 1839749 -7
AMGN 52 2056537 -6
Average 61.25 2300402 -1.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 61.25 hedge funds with bullish positions and the average amount invested in these stocks was $2300 million. That figure was $6887 million in BMY’s case. Costco Wholesale Corporation (NASDAQ:COST) is the most popular stock in this table. On the other hand Amgen, Inc. (NASDAQ:AMGN) is the least popular one with only 52 bullish hedge fund positions. Compared to these stocks Bristol Myers Squibb Company (NYSE:BMY) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. Unfortunately BMY wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on BMY were disappointed as the stock returned 8% during the second quarter (through the end of May) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.

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