Is British American Tobacco PLC (ADR) (BTI) Going to Burn These Hedge Funds?

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Does British American Tobacco PLC (ADR) (NYSEMKT:BTI) represent a good buying opportunity at the moment? Let’s briefly check the hedge fund sentiment towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on research activities, so it is no wonder why they tend to generate millions in profits each year. It is also true that some hedge fund players fail inconceivably on some occasions, but their stock picks have been generating superior risk-adjusted returns on average over the years.

British American Tobacco PLC (ADR) (NYSEMKT:BTI) shareholders have witnessed an increase in enthusiasm from smart money lately. At the end of this article we will also compare BTI to other stocks including TOTAL S.A. (ADR) (NYSE:TOT), BP plc (ADR) (NYSE:BP), and Mastercard Inc (NYSE:MA) to get a better sense of its popularity.

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According to most stock holders, hedge funds are seen as slow, old financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open at the moment, We look at the top tier of this group, approximately 700 funds. These money managers administer the lion’s share of the smart money’s total capital, and by observing their finest stock picks, Insider Monkey has unearthed a few investment strategies that have historically outstripped the broader indices. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Now, let’s take a gander at the recent action surrounding British American Tobacco PLC (ADR) (NYSEMKT:BTI).

What have hedge funds been doing with British American Tobacco PLC (ADR) (NYSEMKT:BTI)?

At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Gardner Russo & Gardner, managed by Tom Russo, holds the largest position in British American Tobacco PLC (ADR) (NYSEMKT:BTI). Gardner Russo & Gardner has an $274.3 million position in the stock, comprising 2.5% of its 13F portfolio. The second largest stake is held by Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $53.3 million position; 0.3% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors with similar optimism consist of Jim Simons’s Renaissance Technologies, William B. Gray’s Orbis Investment Management and Joel Greenblatt’s Gotham Asset Management.

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