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Is The Procter & Gamble Company (PG) A Good Stock To Buy?

We at Insider Monkey have gone over 700 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 The Procter & Gamble Company (NYSE:PG) based on that data.

The Procter & Gamble Company (NYSE:PG) shareholders have witnessed an increase in hedge fund sentiment lately. Our calculations also showed that PG isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

TRIAN PARTNERS

We’re going to view the key hedge fund action surrounding The Procter & Gamble Company (NYSE:PG).

How are hedge funds trading The Procter & Gamble Company (NYSE:PG)?

At the end of the third quarter, a total of 53 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards PG over the last 13 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with PG PositionsMore specifically, Trian Partners was the largest shareholder of The Procter & Gamble Company (NYSE:PG), with a stake worth $3155.1 million reported as of the end of September. Trailing Trian Partners was Yacktman Asset Management, which amassed a stake valued at $1287.2 million. Cedar Rock Capital, Fisher Asset Management, and Two Sigma Advisors were also very fond of the stock, giving the stock large weights in their portfolios.

With a general bullishness amongst the heavyweights, key money managers have jumped into The Procter & Gamble Company (NYSE:PG) headfirst. Element Capital Management, managed by Jeffrey Talpins, initiated the most outsized position in The Procter & Gamble Company (NYSE:PG). Element Capital Management had $8.4 million invested in the company at the end of the quarter. George Soros’s Soros Fund Management also initiated a $8.3 million position during the quarter. The following funds were also among the new PG investors: Benjamin A. Smith’s Laurion Capital Management, Ian Simm’s Impax Asset Management, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as The Procter & Gamble Company (NYSE:PG) but similarly valued. We will take a look at China Mobile Limited (NYSE:CHL), Novartis AG (NYSE:NVS), The Coca-Cola Company (NYSE:KO), and Oracle Corporation (NASDAQ:ORCL). All of these stocks’ market caps resemble PG’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CHL 15 407859 2
NVS 29 1726900 4
KO 43 20664284 4
ORCL 49 8089171 -1
Average 34 7722054 2.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 34 hedge funds with bullish positions and the average amount invested in these stocks was $7.72 billion. That figure was $8.43 billion in PG’s case. Oracle Corporation (NASDAQ:ORCL) is the most popular stock in this table. On the other hand China Mobile Limited (NYSE:CHL) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks The Procter & Gamble Company (NYSE:PG) 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.

Disclosure: None. This article was originally published at Insider Monkey.

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