Hedge Funds Dumped Allergan, Bought Procter & Gamble in Q3
Consumer staples represented the largest aggregate purchases among the top 50 hedge funds during the third quarter of 2016.
Consumer staples represented the largest aggregate purchases among the top 50 hedge funds during the third quarter of 2016. The hedgies bought $12.2 billion worth of stock in consumer staples companies, nearly double the funds’ purchases of $6.3 billion in second-ranked tech stocks.
Health care and consumer discretionary stocks were the most divested shares, with sales of $1.98 billion in health care stocks and $1.49 billion in consumer discretionaries.
Overall hedge funds increased their equities exposure by 2.9% in the quarter, a sharp turnaround from a 1.3% divestiture in equities during the second quarter. The data were reported to last month by FactSet.
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The top purchase among the hedge funds was Procter & Gamble Co. (NYSE: PG), accounting for $8.9 billion in purchases in the consumer staples group. Coty Inc. (NYSE: COTY) nabbed sales of $1.6 billion. In the food and retailing sub-group, Costco Wholesale Corp. (NASDAQ: COST) and Wal-Mart Stores Inc. (NYSE: WMT) led as the group added $1.4 billion in equity exposure.
The two favorite buys in the tech sector were Apple Inc. (NASDAQ: AAPL) with $2.1 billion in purchases and Google parent Alphabet Inc. (NASDAQ: GOOGL). In the second quarter, Apple was the second largest sale among hedge funds, trailing only Netflix Inc. (NASDAQ: NFLX).
Among the health care stocks, the largest outflow came in shares of Allergan PLC (NYSE: AGN), in which hedge funds sold about $1.79 billion worth of stock.
The most widely held equity among the top 50 hedge funds is Facebook Inc. (NYSE: FB). Facebook shares are also the fifth largest holding among hedge funds and accounted for the fourth-largest sales in the third quarter with $1.4 billion in outflows.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
