Hedge fund managers like David Einhorn, Dan Loeb, and Carl Icahn became billionaires by reaping large profits for their investors, which is why piggybacking their stock picks may provide retail investors with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are quite secretive, but one can still get some insight concerning their favored stocks by analyzing their quarterly 13F filings. Hedge funds’ most popular small-cap picks offer one of the most fertile grounds for generating above-market returns (see more details here), as these stocks are not as widely followed as the stocks of larger companies and often trade at a discount to their intrinsic value. However, Goldman Sachs’ so-called VIP list, which comprises the 50 most-owned stocks in the hedge fund industry, provides evidence that retail investors can also generate high trading profits by following money managers’ moves in mid- and large-cap stocks as well. This basket of stocks outperformed the S&P 500 benchmark on a quarterly basis 64% of the time between 2001 and 2015. With this in mind, let’s check out hedge fund activity in Bristol Myers Squibb Co. (NYSE:BMY).
Bristol Myers Squibb Co. (NYSE:BMY) was in 59 hedge funds’ portfolios at the end of the fourth quarter of 2015. BMY investors should be aware of a decrease in hedge fund sentiment lately. There were 62 hedge funds in our database with BMY holdings at the end of the previous quarter. At the end of this article we will also compare BMY to other stocks including Altria Group Inc (NYSE:MO), UnitedHealth Group Inc. (NYSE:UNH), and Sanofi SA (ADR) (NYSE:SNY) to get a better sense of its popularity.
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Follow Bristol Myers Squibb Co (NYSE:BMY)
Bristol Myers Squibb Co. (NYSE:BMY) is a specialty biopharmaceutical company that focuses on the development of innovative medicines for the treatment of various diseases. The company’s total revenue reached $16.56 billion in 2015, increasing from $15.88 billion delivered in the prior year. Bristol Myers Squibb’s U.S revenue, which accounted for approximately half of total revenue in 2015, grew by 6% year-over-year due to the launch of Opdivo and Daklinza and higher demand for Eliquis and Sprycel. Opdivo was approved by the FDA in late 2014 for the treatment of metastatic melanoma, but the drug has since received approval for five additional indications across three different tumor types. Daklinza is designed to treat HCV (hepatitis C virus), while Eliquis is an oral inhibitor aimed at preventing stroke in patients with atrial fibrillation, and preventing and treating venous thromboembolic (VTE) disorders.
In the meantime, it appears that Bristol Myers Squibb Co. (NYSE:BMY)’s negative publicity around bribery allegations in China has been slowly fading away. In October 2015, the drugmaker agreed to pay $14 million to the U.S. Securities and Exchange Commission to settle charges that its Chinese joint-venture violated the Foreign Corrupt Practices Act. These charges were related to alleged “improper payments” made by hospital officials to drive up drug sales in the world’s second-largest pharmaceuticals market. Let’s not forget to mention that the shares of Bristol Myers Squibb have lost 5% since the beginning of 2016.
With all of this in mind, let’s take a look at the latest trading activity regarding Bristol Myers Squibb Co. (NYSE:BMY).
How are hedge funds trading Bristol Myers Squibb Co. (NYSE:BMY)?
Heading into 2016, a total of 59 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 5% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their holdings substantially (or had already accumulated large positions).
According to Insider Monkey’s hedge fund database, OrbiMed Advisors, managed by Samuel Isaly, holds the number one position in Bristol Myers Squibb Co. (NYSE:BMY). OrbiMed Advisors has a $577.5 million position in the stock, comprising 5.2% of its 13F portfolio. Coming in second is Adage Capital Management, managed by Phill Gross and Robert Atchinson, which holds a $385.9 million position; the fund has 1% of its 13F portfolio invested in the stock. Some other peers that are bullish contain Ken Griffin’s Citadel Investment Group, Donald Chiboucis’ Columbus Circle Investors, and Christopher Medlock James’ Partner Fund Management.
Judging by the fact that Bristol Myers Squibb Co. (NYSE:BMY) has experienced bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there exists a select few fund managers that decided to sell off their entire stakes last quarter. At the top of the heap, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital cut the biggest stake of the 700 funds tracked by Insider Monkey, valued at an estimated $65.3 million in stock, and Sanford J. Colen’s Apex Capital was right behind this move, as the fund cut about $14.8 million worth of shares. These bearish behaviors are interesting, as total hedge fund interest fell by 3 funds last quarter.
The final page of this article covers the hedge fund activity in other companies that have market capitalizations similar to BMY’s market cap.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Bristol Myers Squibb Co. (NYSE:BMY) but similarly valued. These stocks are Altria Group Inc (NYSE:MO), UnitedHealth Group Inc. (NYSE:UNH), Sanofi SA (ADR) (NYSE:SNY), and TOTAL S.A. (ADR) (NYSE:TOT). This group of stocks’ market caps are similar to BMY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MO | 42 | 1645115 | 1 |
| UNH | 50 | 2802929 | -1 |
| SNY | 31 | 957411 | 1 |
| TOT | 10 | 57660 | -6 |
As you can see these stocks had an average of 33 hedge funds with bullish positions and the average amount invested in these stocks was $1.37 billion. That figure was $3.10 billion in BMY’s case. UnitedHealth Group Inc. (NYSE:UNH) is the most popular stock in this table. On the other hand TOTAL S.A. (ADR) (NYSE:TOT) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Bristol Myers Squibb Co. (NYSE:BMY) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
