Hedge funds have been increasing their positions in several major companies, signaling potential profitable opportunities for retail investors. Here are seven institutional stock picks that have caught the attention of these hedge funds as we approach the final months of 2023.
One company that has gained interest from hedge funds is GlaxoSmithKline (GSK). At the end of the second quarter, 35 hedge funds had bullish positions in GSK, an increase from 33 at the end of Q1. One notable hedge fund, Ken Fisher’s Fisher Asset Management, held 13.8 million shares of GSK as of June 30. GSK’s Arexvy, a vaccine for the RSV virus, is expected to generate $2.5 billion in sales between 2023 and 2029, according to research firm GlobalData. Additionally, the company’s cancer treatment, Jemperli, continues to gain approvals for new indications. With a low forward price-earnings (P/E) ratio of 9.5 and a high dividend yield of 3.9%, GSK presents an attractive opportunity.
Another company that hedge funds have increased their positions in is Medtronic (MDT), a medical device maker. As of the end of Q2, 63 hedge funds owned shares of Medtronic, up from 52 at the end of Q1. Fisher Asset Management held 3.2 million shares of MDT as of June 30. Medtronic holds a dominant market share in most of its product segments and is expected to benefit from the aging population in Western countries and the growth of improved healthcare in emerging markets, according to the Appleseed Fund. With a 5% increase in sales and a 6% rise in bottom line compared to the same period last year, Medtronic is expected to perform well. The company also has a low forward price-earnings ratio of 16.
Walmart (WMT) has also attracted significant interest from hedge funds, with 91 hedge funds obtaining stakes in the retailer as of the end of Q2. Notable hedge funds that increased their stakes in Walmart include D.E. Shaw and Neuberger Berman. Walmart reported an impressive 6.4% increase in U.S. comparable sales and an 8% surge in operating income, excluding certain items, last quarter. The company raised its 2023 earnings per share guidance, further boosting its position as a top institutional stock pick.
Thermo Fisher Scientific (TMO) has seen its hedge fund ownership increase, with 98 hedge funds owning the stock as of the end of Q2. TMO sells products to life sciences companies and organizations. T. Rowe Price and TCI Fund Management were among the hedge funds that significantly raised their stakes in TMO. The hedge fund Polen Global Growth Strategy praised TMO’s strong management team and considered it a well-balanced and durable investment.
JPMorgan (JPM) has caught the attention of 112 hedge funds, with increased ownership compared to the previous quarter. Wellington Management and T. Rowe Price were among the hedge funds that raised their stakes in JPM. JPMorgan’s large size is seen as a competitive advantage, with the bank managing a significant portion of America’s credit card spending and holding a substantial share of total U.S. deposits, according to Manole Capital Management.
Nvidia (NVDA) has become a top institutional stock pick, with 132 hedge funds owning the stock as of the end of Q2. Geode Capital and Wellington Management Group were among the hedge funds that increased their positions in NVDA. Nvidia’s Q2 results received high praise, with analyst Dan Ives describing them as a historical moment for the tech sector. The company’s outlook and performance have drawn comparisons to elite professional athletes.
Salesforce (CRM) has seen an increase in hedge fund ownership, with 136 hedge funds holding positions in the company as of June 30. Harris Associates had the largest position among hedge funds, owning 7.7 million shares of CRM. Financial institutions also increased their holdings in Salesforce last quarter. JPMorgan raised its price target on CRM stock, highlighting the infusion of Generative AI capabilities into its clouds.
Overall, these seven companies have attracted significant attention from hedge funds, indicating potential opportunities for retail investors. While it’s important to conduct thorough research and consider various factors before making investment decisions, these institutional stock picks provide valuable insights into companies with promising prospects.
