Millennium Management is a global investment management firm that was founded in 1989. The firm, which had $59.6 billion in 13F securities at the end of September, has a well diversified portfolio with consumer staples stocks constituting 22% of the firm’s holdings, and information technology stocks forming another 12%.
During the September quarter, the fund made prominent movements in various stocks including The Procter & Gamble Company (NYSE:PG), Coty Inc. (NYSE:COTY), Merck & Co. (NYSE:MRK), CMS Energy Corporation (NYSE:CMS) and Devon Energy Corp (NYSE:DVN). Let’s analayze further.
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively the most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs.
Leading off, Millennium added 71.7 million shares in The Procter & Gamble Company (NYSE:PG) to its portfolio during the third quarter, bringing its total holding to 72.58 million shares, good for a value of $6.51 billion. It should also be mentioned that Millennium initiated a put on Procter and Gamble in the same period of 27.8 million share-equivalent. Although the stock is still up around 9% year-to-date, shares of Procter and Gamble have dipped since November 8 due to higher interest rate expectations, which make dividend stocks less attractive. Similarly, higher interest rate expectations have also strengthened the dollar, which makes Procter and Gamble’s overseas earnings lower. Of the 742 elite funds we track, 71 funds owned $20.1 billion of Procter & Gamble Co (NYSE:PG) and accounted for 2.50% of the float on September 30, versus 56 funds and $5.54 billion respectively on June 30.
Like it did with P&G, Millennium initiated a billion dollar position in Coty Inc. (NYSE:COTY) from June through September, buying 54 million shares with a total net worth of $1.279 billion (as of the end of Q3). Coty management is currently targeting cumulative working capital benefits of around half a billion and cumulative synergies of $750 million for the next four years. The company is also committed to delivering an adjusted EPS of a minimum of $1.53 for fiscal year 2020. The number of elite funds with holdings in Coty Inc (NYSE:COTY) rose by 33 quarter-over-quarter to 46 at the end of September.
According to the most recent 13F data, Millennium showed some love to Merck & Co. (NYSE:MRK), increasing its position by 121% in the third quarter to 5.44 million shares at the end of September. Shares of the medical giant sold off hard on Wednesday morning on the back of President-elect Donald Trump’s comments that he will cut drug costs. Merck shares have since recovered as some bulls believe Trump’s tax/regulation cuts could offset much of the negatives of Trump’s policies. 84 top funds had a bullish position in Merck & Co., Inc. (NYSE:MRK) as of the most recent 13-F reporting period, up 18 funds from the previous quarter.
Millennium raised its stake in CMS Energy Corporation (NYSE:CMS) by 86%, or 3.44 million shares to 7.44 million shares at the end of Q3. The company recently raised its FY2016 adjusted EPS outlook to $2.02 from the previous $2-$2.02. Shares of the stock are up 16% year-to-date and pay a rather attractive 3.06% dividend yield at current prices. 19 top funds owned shares of CMS Energy Corporation (NYSE:CMS) at the end of September, up 1 fund from the previous quarter.
Millennium channeled its inner energy bull by buying 3.17 million shares of Devon Energy Corp (NYSE:DVN) in Q3, giving it a total of slightly over 7 million shares in the leading oil and gas E&P. Like many other energy stocks, Devon has had a fantastic year, rising over 50% year-to-date on the back of higher crude prices. With OPEC now having ironed out the specifics of its cut, many traders think that the floor for WTI is in place around $40 per barrel (at least for now) and the upside could be OPEC’s target of $55-$60 per barrel minus the typical $3 WTI discount. If WTI trends higher, Devon could follow suit. 50 top funds were long Devon Energy Corp (NYSE:DVN) as of the most recent 13-F reporting period, down 11 funds from the previous quarter.
DISCLOSURE – NONE