In the first quarter, very few mutual funds increased their holdings in personal protective (or PPE) companies such as 3M, Kimberly-Clark and Honeywell International, according to the report. data collected by Reuters.
Mutual funds, in fact, sold $ 760 million worth of shares of the three companies in the first three months of this year, according to data from Symmetric.io, causing the number of hedge funds to hold. The stock of these businesses is only 225, compared to the previous 230.
Ironically, companies quickly seized this opportunity early on, including Maverick Capital, Point72 Asset Management and D.E. Shaw Group, whose business results are not satisfactory when the stock market plummeted this year, even though they hold shares in the company specializing in protective products mentioned above.
Investors share that having the right strategies in the complex epidemic situation is very difficult, especially in the context of world trade is delayed due to concerns related to the spread of viruses, soaring unemployment, soaring oil prices and soaring government spending. By the end of March, the S&P 500 had officially ended the rise for 11 years and turned down about 20% in value.
Large companies engaged in the production and sales of protective products also face unique challenges.
3M, based in St. Paul, Minnesota, is an example. The company has been the focus of recent times when people across the US line up to shop or buy N95 face masks online. But 3M’s share price is still down 15.4% this year because mask sales account for only a small proportion of its total revenue, which is affected by many products for manufacturing that cannot be exported.
3M’s share price is still down 15.4% this year as mask sales account for only a small proportion of its total revenue. Image: Reuters.
Mutual funds Alyeska Investment Group, Laurion Capital Management, Point72 and Balyasny Asset Management all increased their shareholdings at 3M in the first 3 months of this year, while Millennium Management, also bought 3M shares even though it had owns a large number of shares of this company.
Honeywell, a company specializing in the manufacture of electronics and materials for aviation, construction, and many other industries, has been boosting its face masks business since Covid-19 spread.
Maverick owns the most shares in Honeywell but buys more shares of this company. Arrowstreet Capital also bought into Honeywell stock. On May 20, Honeywell’s share price fell 24.3%, higher than the S&P 500’s 8% decline this year.
Mutual funds “bet” on small personal protective companies that produce better results.
Balyasny and Arrowstreet are mutual funds investing in Lakeland Industries, a specialist in protective clothing manufacturing in the first quarter. The company is valued at about $ 108 million. Shares of Lakeland have increased by 26%.
Tudor Investment Corp, Millennium and Arrowstreet invest in MSA Safety in the first 3 months of the year. Shares of MSA, a company that specializes in manufacturing face masks and many other protective products, increased 12% in the past month. Since the beginning of the year, the company’s stock price has risen 4%.
And the Tiburon Opportunity Fund LP, a small mutual fund that invests in stocks in the financial industry, holds and has recently purchased additional shares of Edison Nation Inc., which recently received a mask manufacturing contract. and big hand wash. The company’s stock price has risen 22% in 2020.
Peter Bortel, Tiburon’s manager, said his fund lost about 16% this year, but investments in protective manufacturing companies helped the company reduce losses.
“It’s a great business opportunity,” Bortel said.