The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought The Coca-Cola Company (NYSE:KO) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.
Is The Coca-Cola Company (NYSE:KO) a buy right now? Hedge funds were cutting their exposure. The number of bullish hedge fund positions decreased by 1 recently. The Coca-Cola Company (NYSE:KO) was in 61 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 62. Our calculations also showed that KO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 62 hedge funds in our database with KO holdings at the end of June.
Ray Dalio of Bridgewater Associates
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. Keeping this in mind we’re going to go over the recent hedge fund action surrounding The Coca-Cola Company (NYSE:KO).
Do Hedge Funds Think KO Is A Good Stock To Buy Now?
At the end of September, a total of 61 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -2% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards KO over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Berkshire Hathaway, managed by Warren Buffett, holds the biggest position in The Coca-Cola Company (NYSE:KO). Berkshire Hathaway has a $20.988 billion position in the stock, comprising 7.2% of its 13F portfolio. The second most bullish fund manager is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $488.3 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism comprise Ken Griffin’s Citadel Investment Group, Renaissance Technologies and Ray Dalio’s Bridgewater Associates. In terms of the portfolio weights assigned to each position Berkshire Hathaway allocated the biggest weight to The Coca-Cola Company (NYSE:KO), around 7.15% of its 13F portfolio. Pittencrieff Partners – Gabalex Capital is also relatively very bullish on the stock, earmarking 6.06 percent of its 13F equity portfolio to KO.
Judging by the fact that The Coca-Cola Company (NYSE:KO) has witnessed falling interest from the aggregate hedge fund industry, it’s easy to see that there were a few fund managers that elected to cut their entire stakes last quarter. It’s worth mentioning that Panayotis Takis Sparaggis’s Alkeon Capital Management cut the biggest stake of the “upper crust” of funds monitored by Insider Monkey, comprising an estimated $54.1 million in stock, and Jacob Rothschild’s RIT Capital Partners was right behind this move, as the fund said goodbye to about $39.5 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 1 funds last quarter.
Let’s go over hedge fund activity in other stocks similar to The Coca-Cola Company (NYSE:KO). These stocks are Thermo Fisher Scientific Inc. (NYSE:TMO), Verizon Communications Inc. (NYSE:VZ), Eli Lilly and Company (NYSE:LLY), Novo Nordisk A/S (NYSE:NVO), Danaher Corporation (NYSE:DHR), Intel Corporation (NASDAQ:INTC), and Abbott Laboratories (NYSE:ABT). This group of stocks’ market caps are closest to KO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TMO | 94 | 8210112 | 7 |
| VZ | 57 | 10359205 | -6 |
| LLY | 62 | 4287033 | -2 |
| NVO | 27 | 4053265 | 7 |
| DHR | 74 | 6946837 | -4 |
| INTC | 66 | 6472854 | -12 |
| ABT | 63 | 3611527 | 2 |
| Average | 63.3 | 6277262 | -1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 63.3 hedge funds with bullish positions and the average amount invested in these stocks was $6277 million. That figure was $25137 million in KO’s case. Thermo Fisher Scientific Inc. (NYSE:TMO) is the most popular stock in this table. On the other hand Novo Nordisk A/S (NYSE:NVO) is the least popular one with only 27 bullish hedge fund positions. The Coca-Cola Company (NYSE:KO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KO is 58.9. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. A small number of hedge funds were also right about betting on KO as the stock returned 17.2% since the end of the third quarter (through 1/31) and outperformed the market by an even larger margin.
Follow Coca Cola Co (NYSE:KO)
Follow Coca Cola Co (NYSE:KO)
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Disclosure: None. This article was originally published at Insider Monkey.
