Was The Smart Money Right About Raytheon Technologies Corp (RTX)?

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 December 31st, so let’s proceed with the discussion of the hedge fund sentiment on Raytheon Technologies Corp (NYSE:RTX).

Raytheon Technologies Corp (NYSE:RTX) was in 59 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 81. RTX has seen an increase in support from the world’s most elite money managers recently. There were 55 hedge funds in our database with RTX positions at the end of the third quarter. Our calculations also showed that RTX isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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John Overdeck of Two Sigma

John Overdeck of Two Sigma Advisors

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Do Hedge Funds Think RTX Is A Good Stock To Buy Now?

Heading into the first quarter of 2021, a total of 59 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in RTX over the last 22 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is RTX A Good Stock To Buy?

According to Insider Monkey’s hedge fund database, Fisher Asset Management, managed by Ken Fisher, holds the largest position in Raytheon Technologies Corp (NYSE:RTX). Fisher Asset Management has a $423 million position in the stock, comprising 0.3% of its 13F portfolio. The second most bullish fund manager is Soroban Capital Partners, led by Eric W. Mandelblatt and Gaurav Kapadia, holding a $406 million position; 3.1% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions comprise Farallon Capital, D. E. Shaw’s D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Jade Capital Advisors allocated the biggest weight to Raytheon Technologies Corp (NYSE:RTX), around 5.01% of its 13F portfolio. Fir Tree is also relatively very bullish on the stock, designating 4.59 percent of its 13F equity portfolio to RTX.

With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Farallon Capital, initiated the largest position in Raytheon Technologies Corp (NYSE:RTX). Farallon Capital had $324.8 million invested in the company at the end of the quarter. Javier Velazquez’s Albar Capital also initiated a $9.3 million position during the quarter. The other funds with brand new RTX positions are Robert Vincent McHugh’s Jade Capital Advisors, Paul Tudor Jones’s Tudor Investment Corp, and Michael Cowley’s Sandbar Asset Management.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Raytheon Technologies Corp (NYSE:RTX) but similarly valued. We will take a look at ServiceNow Inc (NYSE:NOW), HSBC Holdings plc (NYSE:HSBC), Intuit Inc. (NASDAQ:INTU), Toronto-Dominion Bank (NYSE:TD), Sea Limited (NYSE:SE), 3M Company (NYSE:MMM), and American Tower Corporation (NYSE:AMT). All of these stocks’ market caps resemble RTX’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NOW 96 6849288 14
HSBC 14 330089 4
INTU 68 4693235 14
TD 22 171021 7
SE 115 10868553 20
MMM 44 1367331 -12
AMT 61 4726391 -1
Average 60 4143701 6.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 60 hedge funds with bullish positions and the average amount invested in these stocks was $4144 million. That figure was $2729 million in RTX’s case. Sea Limited (NYSE:SE) is the most popular stock in this table. On the other hand HSBC Holdings plc (NYSE:HSBC) is the least popular one with only 14 bullish hedge fund positions. Raytheon Technologies Corp (NYSE:RTX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RTX is 53.1. 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. Our calculations showed that top 10 most popular stocks among hedge funds returned 90.7% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 35 percentage points. These stocks gained 13.6% in 2021 through April 30th and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on RTX as the stock returned 17.1% since the end of the fourth quarter (through 4/30) and outperformed the market by an even larger margin.

Follow Raytheon Technologies Corp (NYSE:RTX)

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