Several news stories in the media recently discussed the performance of the “VIP” stock list compiled by Goldman Sachs, which includes the 50 most-owned stocks among hedge funds. Although this “VIP” list has underperformed broader market benchmarks so far in 2016, this basket of stocks outperformed the S&P 500 on a quarterly basis 64% of the time since 2001 through 2015. This evidence is quite impressive, and makes us believe that individual investors could generate big trading profits by picking some winners from this list of 50 companies that matter the most to hedge funds managers. In fact, Goldman Sachs is currently working on launching a new ETF called the Goldman Sachs Hedge Fund VIP ETF, based on the 50 most-owned stocks among hedge funds. Clearly, analysts from Goldman Sachs do believe in the hedge funds’ ability to identify high-potential stocks. This represents the main reason why Insider Monkey takes notice of hedge fund activity, so this article will solely focus on discussing smart money investors’ activity around McDonald’s Corporation (NYSE:MCD).
McDonald’s Corporation (NYSE:MCD) shareholders have witnessed an increase in activity from the world’s largest hedge funds lately. MCD was in 84 hedge funds’ portfolios at the end of the fourth quarter of 2015. There were 75 hedge funds in our database with MCD holdings at the end of the previous quarter. At the end of this article we will also compare MCD to other stocks, including CVS Caremark Corporation (NYSE:CVS), Mastercard Inc (NYSE:MA), and British American Tobacco PLC (ADR) (NYSEAMEX:BTI) to get a better sense of its popularity.
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The global fast food restaurant chain, which operates and franchises 36,525 restaurants in 119 countries as of the end of December 2015, operates in a highly-competitive market that is constantly shaped by changing food trends and consumer preferences. McDonald’s Corporation (NYSE:MCD) generated total revenues of $25.41 billion in 2015, notably below the $27.44 billion delivered in 2014 and $28.11 billion in 2013. However, these figures do not represent an accurate snapshot of the company’s actual performance. The company’s 2015 consolidated revenues increased 3% year-on-year in constant currencies, while its global comparable sales grew 1.5% year-on-year. Moreover, McDonald’s embarked on a turnaround journey last year in an attempt to reset its business and boost growth. As a result, the company disposed of its geographically-focused structure and decided to focus on segments that combine end-markets with comparable characteristics and opportunities for growth instead. The new operating structure is expected to increase the company’s focus on its consumers and provide greater accountability. It appears that the new turnaround efforts have already started to bear fruit, as McDonald’s Corporation (NYSE:MCD)’s shares have advanced 18% over the past 12 months.