We at Insider Monkey have gone over 817 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of NIKE, Inc. (NYSE:NKE) based on that data.
Is NIKE, Inc. (NYSE:NKE) a good stock to buy now? The best stock pickers were taking a bullish view. The number of bullish hedge fund positions inched up by 4 lately. NIKE, Inc. (NYSE:NKE) was in 75 hedge funds’ portfolios at the end of September. The all time high for this statistics is 81. Our calculations also showed that NKE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most investors, hedge funds are viewed as underperforming, old investment vehicles of years past. While there are more than 8000 funds in operation today, Our researchers choose to focus on the upper echelon of this group, around 850 funds. These hedge fund managers have their hands on the majority of the hedge fund industry’s total capital, and by monitoring their matchless equity investments, Insider Monkey has unearthed numerous investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
Richard Driehaus of Driehaus Capital
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Hedge fund activity in NIKE, Inc. (NYSE:NKE)
At the end of the third quarter, a total of 75 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards NKE over the last 21 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
Among these funds, Fisher Asset Management held the most valuable stake in NIKE, Inc. (NYSE:NKE), which was worth $840.3 million at the end of the third quarter. On the second spot was Melvin Capital Management which amassed $345.9 million worth of shares. Ako Capital, D E Shaw, and GuardCap Asset Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Immersion Capital allocated the biggest weight to NIKE, Inc. (NYSE:NKE), around 10.11% of its 13F portfolio. Broad Peak Investment Holdings is also relatively very bullish on the stock, dishing out 8.61 percent of its 13F equity portfolio to NKE.
Now, specific money managers have jumped into NIKE, Inc. (NYSE:NKE) headfirst. Driehaus Capital, managed by Richard Driehaus, created the most outsized position in NIKE, Inc. (NYSE:NKE). Driehaus Capital had $94 million invested in the company at the end of the quarter. Lee Ainslie’s Maverick Capital also initiated a $83.4 million position during the quarter. The other funds with new positions in the stock are Leon Shaulov’s Maplelane Capital, Brian Scudieri’s Kehrs Ridge Capital, and Renaissance Technologies.
Let’s now take a look at hedge fund activity in other stocks similar to NIKE, Inc. (NYSE:NKE). We will take a look at Abbott Laboratories (NYSE:ABT), PepsiCo, Inc. (NYSE:PEP), SAP SE (NYSE:SAP), Toyota Motor Corporation (NYSE:TM), Oracle Corporation (NASDAQ:ORCL), Thermo Fisher Scientific Inc. (NYSE:TMO), and Cisco Systems, Inc. (NASDAQ:CSCO). This group of stocks’ market caps resemble NKE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ABT | 62 | 4285555 | -5 |
| PEP | 52 | 2937459 | -1 |
| SAP | 16 | 1806430 | 0 |
| TM | 12 | 698753 | -1 |
| ORCL | 56 | 2338102 | 7 |
| TMO | 80 | 4972042 | 7 |
| CSCO | 59 | 3931205 | 0 |
| Average | 48.1 | 2995649 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 48.1 hedge funds with bullish positions and the average amount invested in these stocks was $2996 million. That figure was $4218 million in NKE’s case. Thermo Fisher Scientific Inc. (NYSE:TMO) is the most popular stock in this table. On the other hand Toyota Motor Corporation (NYSE:TM) is the least popular one with only 12 bullish hedge fund positions. NIKE, Inc. (NYSE:NKE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NKE is 83.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and beat the market again by 16.1 percentage points. Unfortunately NKE wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on NKE were disappointed as the stock returned 6.9% since the end of September (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
