Is Boeing (BA) Stock A Buy or Sell?

Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards The Boeing Company (NYSE:BA) changed recently.

Is Boeing (BA) stock a buy or sell? Hedge funds were getting more optimistic. The number of long hedge fund bets went up by 12 lately. The Boeing Company (NYSE:BA) was in 55 hedge funds’ portfolios at the end of December. The all time high for this statistic is 83. Our calculations also showed that BA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 43 hedge funds in our database with BA holdings at the end of September.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.


Philippe Laffont of Coatue Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock 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. 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 homepage (or at the end of this article). Now we’re going to take a glance at the key hedge fund action surrounding The Boeing Company (NYSE:BA).

Do Hedge Funds Think BA Is A Good Stock To Buy Now?

Heading into the first quarter of 2021, a total of 55 of the hedge funds tracked by Insider Monkey were long this stock, a change of 28% from the previous quarter. On the other hand, there were a total of 82 hedge funds with a bullish position in BA a year ago. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were upping their stakes considerably (or already accumulated large positions).

Among these funds, Millennium Management held the most valuable stake in The Boeing Company (NYSE:BA), which was worth $178.3 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $136.9 million worth of shares. Adage Capital Management, NWI Management, and Renaissance Technologies were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Jade Capital Advisors allocated the biggest weight to The Boeing Company (NYSE:BA), around 7.11% of its 13F portfolio. Heard Capital is also relatively very bullish on the stock, designating 6.29 percent of its 13F equity portfolio to BA.

Consequently, key hedge funds have been driving this bullishness. Renaissance Technologies, established the biggest position in The Boeing Company (NYSE:BA). Renaissance Technologies had $53.1 million invested in the company at the end of the quarter. Philippe Laffont’s Coatue Management also initiated a $44.8 million position during the quarter. The following funds were also among the new BA investors: Anand Parekh’s Alyeska Investment Group, Clint Murray’s Lodge Hill Capital, and Sahm Adrangi’s Kerrisdale Capital.

Let’s now take a look at hedge fund activity in other stocks similar to The Boeing Company (NYSE:BA). These stocks are Lowe’s Companies, Inc. (NYSE:LOW), China Mobile Limited (NYSE:CHL), Royal Bank of Canada (NYSE:RY), International Business Machines Corp. (NYSE:IBM), Advanced Micro Devices, Inc. (NASDAQ:AMD), TOTAL SE (NYSE:TOT), and BlackRock, Inc. (NYSE:BLK). This group of stocks’ market caps are closest to BA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
LOW 71 5192115 -12
CHL 13 275668 3
RY 18 177204 2
IBM 51 998446 11
AMD 74 6688629 3
TOT 14 980330 -4
BLK 53 1155646 14
Average 42 2209720 2.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 42 hedge funds with bullish positions and the average amount invested in these stocks was $2210 million. That figure was $1057 million in BA’s case. Advanced Micro Devices, Inc. (NASDAQ:AMD) is the most popular stock in this table. On the other hand China Mobile Limited (NYSE:CHL) is the least popular one with only 13 bullish hedge fund positions. The Boeing Company (NYSE:BA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BA is 64.3. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on BA as the stock returned 19.5% since the end of Q4 (through 3/19) 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.