Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Valeant and SunEdison, have not done well during the last 12 months due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average. The top 30 mid-cap stocks (market caps between $1 billion and $10 billion) among hedge funds delivered an average return of 18% during the last four quarters. S&P 500 Index returned only 7.6% during the same period and less than 49% of its constituents managed to beat this return. Because their consensus picks have done well, we pay attention to what elite funds and billionaire investors think before doing extensive research on a stock. In this article, we take a closer look at Bristol Myers Squibb Co. (NYSE:BMY) from the perspective of those elite funds.
Bristol Myers Squibb Co. (NYSE:BMY) investors should pay attention to a decrease in support from the world’s elite money managers in recent months. There were 59 investors tracked by us holding shares of the company at the end of September down from 61 funds a quarter earlier. At the end of this article we will also compare BMY to other stocks including British American Tobacco PLC (ADR) (NYSEAMEX:BTI), Amgen, Inc. (NASDAQ:AMGN), and TOTAL S.A. (ADR) (NYSE:TOT) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Keeping this in mind, we’re going to view the latest action encompassing Bristol Myers Squibb Co. (NYSE:BMY).
Hedge fund activity in Bristol Myers Squibb Co. (NYSE:BMY)
Heading into the fourth quarter of 2016, a total of 59 of the hedge funds tracked by Insider Monkey held long positions in this stock, down by 3% over the quarter. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, David E. Shaw’s D E Shaw has the biggest position in Bristol Myers Squibb Co. (NYSE:BMY), worth close to $392.8 million, amounting to 0.7% of its total 13F portfolio. Coming in second is Jim Simons’ Renaissance Technologies holding a $255.6 million position; 0.5% of its 13F portfolio is allocated to the stock. Other peers that are bullish comprise Phill Gross and Robert Atchinson’s Adage Capital Management, Principal Global Investors’s Columbus Circle Investors, and Samuel Isaly’s OrbiMed Advisors.
Since Bristol Myers Squibb Co. (NYSE:BMY) has experienced falling interest from the entirety of the hedge funds we track, it’s easy to see that there were a few hedgies that decided to sell off their full holdings last quarter. At the top of the heap, Christopher James’ Partner Fund Management said goodbye to the largest investment of the “upper crust” of funds tracked by Insider Monkey, valued at close to $134.6 million in call options, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dumped about $43.3 million worth of shares.
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 British American Tobacco PLC (ADR) (NYSEAMEX:BTI), Amgen, Inc. (NASDAQ:AMGN), TOTAL S.A. (ADR) (NYSE:TOT), and Gilead Sciences, Inc. (NASDAQ:GILD). This group of stocks’ market values are closest to BMY’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 44 hedge funds with bullish positions and the average amount invested in these stocks was $1.51 billion. That figure was $2.28 billion in BMY’s case. With 87 investors holding shares, Gilead Sciences, Inc. (NASDAQ:GILD) is the most popular stock in this table, while TOTAL S.A. (ADR) (NYSE:TOT) is the least popular one with only 14 bullish hedge fund positions. Bristol Myers Squibb Co. (NYSE:BMY) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard, Gilead Sciences, Inc. (NASDAQ:GILD) might be a better candidate to consider a long position.