In this article you are going to find out whether hedge funds think Becton, Dickinson and Company (NYSE:BDX) 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.
Is BDX a good stock to buy now? Becton, Dickinson and Company (NYSE:BDX) investors should be aware of an increase in activity from the world’s largest hedge funds recently. Becton, Dickinson and Company (NYSE:BDX) was in 62 hedge funds’ portfolios at the end of September. The all time high for this statistics is 56. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BDX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
According to most market participants, hedge funds are perceived as underperforming, old financial tools of years past. While there are greater than 8000 funds in operation today, Our researchers hone in on the leaders of this club, approximately 850 funds. Most estimates calculate that this group of people shepherd bulk of the hedge fund industry’s total asset base, and by watching their inimitable stock picks, Insider Monkey has determined numerous investment strategies that have historically defeated the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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. Tesla’s stock price skyrocketed, yet lithium prices are still below their 2019 highs. So, we are checking out this lithium stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 website. Now let’s take a peek at the fresh hedge fund action regarding Becton, Dickinson and Company (NYSE:BDX).
What have hedge funds been doing with Becton, Dickinson and Company (NYSE:BDX)?
Heading into the fourth quarter of 2020, a total of 62 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BDX over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Becton, Dickinson and Company (NYSE:BDX) was held by Generation Investment Management, which reported holding $830.3 million worth of stock at the end of September. It was followed by Cantillon Capital Management with a $279.7 million position. Other investors bullish on the company included D E Shaw, Intermede Investment Partners, and Adage Capital Management. In terms of the portfolio weights assigned to each position Intermede Investment Partners allocated the biggest weight to Becton, Dickinson and Company (NYSE:BDX), around 4.91% of its 13F portfolio. Generation Investment Management is also relatively very bullish on the stock, earmarking 4.41 percent of its 13F equity portfolio to BDX.
As one would reasonably expect, specific money managers have been driving this bullishness. Highbridge Capital Management, created the biggest position in Becton, Dickinson and Company (NYSE:BDX). Highbridge Capital Management had $23.2 million invested in the company at the end of the quarter. Ray Dalio’s Bridgewater Associates also made a $16 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Daniel S. Och’s OZ Management, and Michael Platt and William Reeves’s BlueCrest Capital Mgmt..
Let’s now take a look at hedge fund activity in other stocks similar to Becton, Dickinson and Company (NYSE:BDX). These stocks are Equinix, Inc. (REIT) (NASDAQ:EQIX), The TJX Companies, Inc. (NYSE:TJX), Dominion Energy Inc. (NYSE:D), Colgate-Palmolive Company (NYSE:CL), FedEx Corporation (NYSE:FDX), Air Products & Chemicals, Inc. (NYSE:APD), and Duke Energy Corporation (NYSE:DUK). All of these stocks’ market caps match BDX’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 51.4 hedge funds with bullish positions and the average amount invested in these stocks was $1673 million. That figure was $1939 million in BDX’s case. The TJX Companies, Inc. (NYSE:TJX) is the most popular stock in this table. On the other hand Duke Energy Corporation (NYSE:DUK) is the least popular one with only 36 bullish hedge fund positions. Becton, Dickinson and Company (NYSE:BDX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BDX is 71. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 31.6% in 2020 through December 2nd and beat the market again by 16 percentage points. Unfortunately BDX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on BDX were disappointed as the stock returned 3.9% since the end of September (through 12/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Follow Becton Dickinson & Co (NYSE:BDX)
Follow Becton Dickinson & Co (NYSE:BDX)
Disclosure: None. This article was originally published at Insider Monkey.