What This Metric Says about Philip Morris International Inc. (PM)

Page 1 of 2

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips on the charts, usually don’t make them change their opinion towards a company. The second half of 2015 and the first few months of this year was a stressful period for hedge funds. However, things have been taking a turn for the better in the second half of this year. Small-cap stocks which hedge funds are usually overweight outperformed the market by double digits and it may be a good time to pay attention to hedge funds’ picks before it is too late. In this article we are going to analyze the hedge fund sentiment towards Philip Morris International Inc. (NYSE:PM) to find out whether it was one of their high conviction long-term ideas.

Overall, in Philip Morris International Inc. (NYSE:PM)’s case, it looks like hedge funds are in a slightly pessimistic mood. The number of long hedge fund positions fell by two during the third quarter and the company was included in the equity portfolios of 45 funds in our database at the end of September. Nevertheless, 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 Medtronic, Inc. (NYSE:MDT), Intel Corporation (NASDAQ:INTC), and Toyota Motor Corporation (ADR) (NYSE:TM) to gather more data points.

Follow Philip Morris International Inc. (NYSE:PM)

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

Largest Stock Exchanges in Asia by Volume

Songquan Deng / Shutterstock.com

With all of this in mind, we’re going to take a look at the fresh action regarding Philip Morris International Inc. (NYSE:PM).

How are hedge funds trading Philip Morris International Inc. (NYSE:PM)?

At the end of the third quarter, a total of 45 of the hedge funds tracked by Insider Monkey were long Philip Morris International, down by 4% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).


Of the funds tracked by Insider Monkey, Cedar Rock Capital, managed by Andy Brown, holds the number one position in Philip Morris International Inc. (NYSE:PM). Cedar Rock Capital has a $1.16 billion position in the stock, comprising 28.3% of its 13F portfolio. The second most bullish fund manager is Tom Russo’s Gardner Russo & Gardner, which holds a $1.0 billion position; the fund has 8.3% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism encompass Lee Ainslie’s Maverick Capital, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and John Overdeck and David Siegel’s Two Sigma Advisors.

Page 1 of 2