The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Starbucks Corporation (NASDAQ:SBUX).
Starbucks Corporation (NASDAQ:SBUX) has experienced an increase in activity from the world’s largest hedge funds in recent months. Starbucks Corporation (NASDAQ:SBUX) was in 63 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 68. There were 61 hedge funds in our database with SBUX holdings at the end of March. Our calculations also showed that SBUX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Ken Fisher of Fisher Asset Management
At Insider Monkey, we scour multiple sources to uncover 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 EV 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 take a look at the recent hedge fund action regarding Starbucks Corporation (NASDAQ:SBUX).
Do Hedge Funds Think SBUX Is A Good Stock To Buy Now?
At the end of June, a total of 63 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 3% from one quarter earlier. On the other hand, there were a total of 54 hedge funds with a bullish position in SBUX a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Fundsmith LLP, managed by Terry Smith, holds the biggest position in Starbucks Corporation (NASDAQ:SBUX). Fundsmith LLP has a $1.2015 billion position in the stock, comprising 3.3% of its 13F portfolio. On Fundsmith LLP’s heels is Ken Fisher of Fisher Asset Management, with a $890.1 million position; 0.6% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors with similar optimism contain Andy Brown’s Cedar Rock Capital, and Stanley Druckenmiller’s Duquesne Capital. In terms of the portfolio weights assigned to each position Pacifica Capital Investments allocated the biggest weight to Starbucks Corporation (NASDAQ:SBUX), around 14.62% of its 13F portfolio. Cedar Rock Capital is also relatively very bullish on the stock, earmarking 13.69 percent of its 13F equity portfolio to SBUX.
As industrywide interest jumped, some big names were leading the bulls’ herd. Incline Global Management, managed by Jeff Lignelli, initiated the biggest position in Starbucks Corporation (NASDAQ:SBUX). Incline Global Management had $46.9 million invested in the company at the end of the quarter. Steven Boyd’s Armistice Capital also made a $26.8 million investment in the stock during the quarter. The other funds with brand new SBUX positions are Dmitry Balyasny’s Balyasny Asset Management, David Costen Haley’s HBK Investments, and Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital.
Let’s now review hedge fund activity in other stocks similar to Starbucks Corporation (NASDAQ:SBUX). We will take a look at Sanofi (NASDAQ:SNY), International Business Machines Corp. (NYSE:IBM), Applied Materials, Inc. (NASDAQ:AMAT), Raytheon Technologies Corp (NYSE:RTX), The Goldman Sachs Group, Inc. (NYSE:GS), The Toronto-Dominion Bank (NYSE:TD), and JD.Com Inc (NASDAQ:JD). This group of stocks’ market caps resemble SBUX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SNY | 16 | 1261299 | 1 |
| IBM | 41 | 1373521 | 0 |
| AMAT | 73 | 4594094 | -5 |
| RTX | 53 | 2112283 | -5 |
| GS | 61 | 5183843 | -16 |
| TD | 17 | 303083 | -2 |
| JD | 76 | 10697800 | 1 |
| Average | 48.1 | 3646560 | -3.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 48.1 hedge funds with bullish positions and the average amount invested in these stocks was $3647 million. That figure was $4758 million in SBUX’s case. JD.Com Inc (NASDAQ:JD) is the most popular stock in this table. On the other hand Sanofi (NASDAQ:SNY) is the least popular one with only 16 bullish hedge fund positions. Starbucks Corporation (NASDAQ:SBUX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SBUX is 74. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 25.7% in 2021 through September 27th and beat the market again by 6.2 percentage points. Unfortunately SBUX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SBUX were disappointed as the stock returned 2.1% since the end of June (through 9/27) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
