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Should You Buy Becton, Dickinson and Co. (BDX)?

Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.

Becton, Dickinson and Co. (NYSE:BDX) has experienced an increase in support from the world’s most elite money managers lately. BDX was in 36 hedge funds’ portfolios at the end of September. There were 35 hedge funds in our database with BDX holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as American Electric Power Company, Inc. (NYSE:AEP), The Chubb Corporation (NYSE:CB), and Monster Beverage Corp (NASDAQ:MNST) to gather more data points.

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With all of this in mind, we’re going to take a glance at the latest action surrounding Becton, Dickinson and Co. (NYSE:BDX).

How have hedgies been trading Becton, Dickinson and Co. (NYSE:BDX)?

At the end of the third quarter, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Renaissance Technologies, managed by Jim Simons, holds the most valuable position in Becton, Dickinson and Co. (NYSE:BDX). Renaissance Technologies has a $215 million position in the stock, comprising 0.5% of its 13F portfolio. Sitting at the No. 2 spot is Generation Investment Management, managed by David Blood and Al Gore, which holds a $170.1 million position; the fund has 2.5% of its 13F portfolio invested in the stock. Remaining peers with similar optimism include Richard Chilton’s Chilton Investment Company, Anand Parekh’s Alyeska Investment Group and David Harding’s Winton Capital Management.

Now, specific money managers were leading the bulls’ herd. Alyeska Investment Group, managed by Anand Parekh, assembled the most outsized position in Becton, Dickinson and Co. (NYSE:BDX). Alyeska Investment Group had $85.9 million invested in the company at the end of the quarter. Joe DiMenna’s ZWEIG DIMENNA PARTNERS also initiated a $11.3 million position during the quarter. The other funds with new positions in the stock are Matthew Tewksbury’s Stevens Capital Management, Alec Litowitz and Ross Laser’s Magnetar Capital, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s go over hedge fund activity in other stocks similar to Becton, Dickinson and Co. (NYSE:BDX). These stocks are American Electric Power Company, Inc. (NYSE:AEP), The Chubb Corporation (NYSE:CB), Monster Beverage Corp (NASDAQ:MNST), and Marsh & McLennan Companies, Inc. (NYSE:MMC). This group of stocks’ market caps resemble BDX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AEP 29 785217 0
CB 48 1431617 23
MNST 27 772542 0
MMC 26 486154 -6

As you can see these stocks had an average of 32.5 hedge funds with bullish positions and the average amount invested in these stocks was $869 million. That figure was $1159 million in BDX’s case. The Chubb Corporation (NYSE:CB) is the most popular stock in this table. On the other hand Marsh & McLennan Companies, Inc. (NYSE:MMC) is the least popular one with only 26 bullish hedge fund positions. Becton, Dickinson and Co. (NYSE:BDX) 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 CB might be a better candidate to consider a long position.

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