A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30th, so let’s proceed with the discussion of the hedge fund sentiment on Wal-Mart Stores, Inc. (NYSE:WMT).
Is Wal-Mart Stores, Inc. a good investment now? Prominent investors are taking a bearish view. The number of bullish hedge fund bets went down by 4 in recent months. At the end of this article we will also compare WMT to other stocks including AT&T Inc. (NYSE:T), The Procter & Gamble Company (NYSE:PG), and Pfizer Inc. (NYSE:PFE) to get a better sense of its popularity.
Follow Walmart Inc. (NYSE:WMT)
Follow Walmart Inc. (NYSE:WMT)
To the average investor there are tons of tools investors put to use to value stocks. Some of the less known tools are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the top hedge fund managers can outperform the market by a superb margin (see the details here).
With all of this in mind, let’s review the latest action regarding Wal-Mart Stores, Inc. (NYSE:WMT).
What does the smart money think about Wal-Mart Stores, Inc. (NYSE:WMT)?
At the end of the third quarter, a total of 61 of the hedge funds tracked by Insider Monkey were long in this stock, a change of -6% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Berkshire Hathaway, managed by Warren Buffett, holds the most valuable position in Wal-Mart Stores, Inc. (NYSE:WMT). Berkshire Hathaway has a $3.64 billion position in the stock, comprising 2.9% of its 13F portfolio. On Berkshire Hathaway’s heels is Bill & Melinda Gates Foundation Trust, managed by Michael Larson, which holds a $752.3 million position; the fund has 4.4% of its 13F portfolio invested in the stock. Other hedge funds that hold long positions encompass Mike Masters’s Masters Capital Management, Richard S. Pzena’s Pzena Investment Management and Cliff Asness’s AQR Capital Management.
Seeing as Wal-Mart Stores, Inc. (NYSE:WMT) has witnessed a declination in interest from the aggregate hedge fund industry, logic holds that there is a sect of funds that decided to sell off their full holdings at the end of the third quarter. It’s worth mentioning that Anand Parekh’s Alyeska Investment Group sold off the biggest position of the “upper crust” of funds tracked by Insider Monkey, comprising close to $397.2 million in stock. Neil Chriss’s fund, Hutchin Hill Capital, also said goodbye to its stock, about $42.7 million worth. These transactions are interesting, as total hedge fund interest fell by 4 funds at the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Wal-Mart Stores, Inc. (NYSE:WMT). These stocks are AT&T Inc. (NYSE:T), The Procter & Gamble Company (NYSE:PG), Pfizer Inc. (NYSE:PFE), and Toyota Motor Corporation (ADR) (NYSE:TM). This group of stocks’ market valuations are closest to WMT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| T | 60 | 3758951 | 11 |
| PG | 58 | 9063165 | 0 |
| PFE | 97 | 6090993 | 12 |
| TM | 13 | 229565 | 2 |
As you can see these stocks had an average of 57 hedge funds with bullish positions and the average amount invested in these stocks was $4,786 million.That figure was $7,089 million in WMT’s case. Pfizer Inc. (NYSE:PFE) is the most popular stock in this table. On the other hand Toyota Motor Corporation (ADR) (NYSE:TM) is the least popular one with only 13 bullish hedge fund positions. Wal-Mart Stores, Inc. (NYSE:WMT) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard PFE might be a better candidate to consider a long position.
