Is Johnson Controls International plc (JCI) a Good Stock To Buy?

Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we will analyze Johnson Controls International plc Ordinary Share (NYSE:JCI) from the perspective of those elite funds.

Johnson Controls International plc Ordinary Share (NYSE:JCI) was included in the equity portfolios of 55 funds from our database at the end of the third quarter. JCI investors should be aware of an increase in enthusiasm from smart money, as there had been 32 funds with JCI holdings at the end of the previous quarter. However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as SYSCO Corporation (NYSE:SYY), Kellogg Company (NYSE:K), and Intuit Inc. (NASDAQ:INTU) to gather more data points.

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.

With all of this in mind, we’re going to go over the new action encompassing Johnson Controls International plc Ordinary Share (NYSE:JCI).

How are hedge funds trading Johnson Controls International plc Ordinary Share (NYSE:JCI)?

A total of 55 hedge funds tracked by Insider Monkey were bullish on Johnson Controls at the end of September, which represents an increase of 72% over the quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Matt Sirovich and Jeremy Mindich’s Scopia Capital has the largest position in Johnson Controls International plc Ordinary Share (NYSE:JCI), worth close to $278.8 million, comprising 4.9% of its total 13F portfolio. Coming in second is JANA Partners, led by Barry Rosenstein, holding a $260.5 million position; 4.6% of its 13F portfolio is allocated to the company. Remaining professional money managers with similar optimism encompass John Smith Clark’s Southpoint Capital Advisors and Andreas Halvorsen’s Viking Global.

With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. JANA Partners created the most outsized position in Johnson Controls International plc Ordinary Share (NYSE:JCI). John Burbank’s Passport Capital also initiated a $219.2 million position during the quarter. Two other funds with brand new JCI positions are Anand Parekh’s Alyeska Investment Group and Jacob Doft’s Highline Capital Management.

Let’s now review hedge fund activity in other stocks similar to Johnson Controls International plc Ordinary Share (NYSE:JCI)). These stocks are SYSCO Corporation (NYSE:SYY), Kellogg Company (NYSE:K), Intuit Inc. (NASDAQ:INTU), and Sempra Energy (NYSE:SRE). This group of stocks’ market caps resemble JCI’s market cap.

As you can see these stocks had an average of 29 investors with bullish positions and the average amount invested in these stocks was $1.55 billion. That figure was $2.83 billion in JCI’s case. Kellogg Company (NYSE:K) is the most popular stock in this table with 39 funds holding shares. On the other hand Sempra Energy (NYSE:SRE) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Johnson Controls International plc Ordinary Share (NYSE:JCI) 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.