Where Do Hedge Funds Stand On Becton, Dickinson and Company (BDX)?

·6 min read

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Becton, Dickinson and Company (NYSE:BDX) based on those filings.

Becton, Dickinson and Company (NYSE:BDX) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 65 hedge funds' portfolios at the end of March. Our calculations also showed that BDX isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). 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 Illinois Tool Works Inc. (NYSE:ITW), Norfolk Southern Corp. (NYSE:NSC), and KE Holdings Inc (NYSE:BEKE) to gather more data points.

At the moment there are several metrics market participants put to use to appraise their stock investments. Some of the less utilized metrics are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the top money managers can outperform the market by a significant margin (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Kamran Moghtaderi of Eversept Partners

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best hydrogen fuel cell stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let's view the key hedge fund action regarding Becton, Dickinson and Company (NYSE:BDX).

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

At Q1's end, a total of 65 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in BDX over the last 23 quarters. With hedgies' capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

The largest stake in Becton, Dickinson and Company (NYSE:BDX) was held by Fundsmith LLP, which reported holding $1054 million worth of stock at the end of December. It was followed by Generation Investment Management with a $932.6 million position. Other investors bullish on the company included Cantillon Capital Management, Renaissance Technologies, and Impax Asset Management. In terms of the portfolio weights assigned to each position Columbus Point allocated the biggest weight to Becton, Dickinson and Company (NYSE:BDX), around 7.67% of its 13F portfolio. Generation Investment Management is also relatively very bullish on the stock, setting aside 3.91 percent of its 13F equity portfolio to BDX.

Seeing as Becton, Dickinson and Company (NYSE:BDX) has faced declining sentiment from the entirety of the hedge funds we track, we can see that there were a few funds that decided to sell off their full holdings by the end of the first quarter. At the top of the heap, Andreas Halvorsen's Viking Global dropped the largest investment of the 750 funds monitored by Insider Monkey, comprising an estimated $128 million in stock, and Steve Cohen's Point72 Asset Management was right behind this move, as the fund said goodbye to about $40.5 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let's also examine hedge fund activity in other stocks similar to Becton, Dickinson and Company (NYSE:BDX). We will take a look at Illinois Tool Works Inc. (NYSE:ITW), Norfolk Southern Corp. (NYSE:NSC), KE Holdings Inc (NYSE:BEKE), Dell Technologies Inc. (NYSE:DELL), Brookfield Asset Management Inc. (NYSE:BAM), Westpac Banking Corporation (NYSE:WBK), and Colgate-Palmolive Company (NYSE:CL). This group of stocks' market valuations are similar to BDX's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ITW,33,411615,-7 NSC,46,898621,2 BEKE,33,2308833,3 DELL,54,4834607,4 BAM,34,1388352,-4 WBK,3,35365,0 CL,48,2304590,2 Average,35.9,1740283,0 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 35.9 hedge funds with bullish positions and the average amount invested in these stocks was $1740 million. That figure was $3733 million in BDX's case. Dell Technologies Inc. (NYSE:DELL) is the most popular stock in this table. On the other hand Westpac Banking Corporation (NYSE:WBK) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Becton, Dickinson and Company (NYSE:BDX) is more popular among hedge funds. Our overall hedge fund sentiment score for BDX is 85. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. Unfortunately BDX wasn't nearly as popular as these 5 stocks and hedge funds that were betting on BDX were disappointed as the stock returned 0.1% since the end of the first quarter (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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

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