The personal products and household goods industry is one of those that has a few key players, and no wonder; after all, it would be very difficult for a no-name brand to compete head to head with Procter Gamble (NYSE:PG) or Philip Morris (NYSE:PM). Even among those companies already established, these companies represent brands and products that have exceptionally high customer loyalty. For instance, how many smokers change brands of cigarettes? This is also one of the defensive industries that hold up well during market turmoil. Hedge fund managers take notice of these trends and invest accordingly.
Here is a list of seven personal and household goods stocks that hedge funds love:
Procter & Gamble Co (PG): Of the 300+ hedge funds we track, 41 had positions in PG at the end of the third quarter, down from 40 at the end of the second quarter. While the number of hedge funds invested in the company decreased significantly, the volume of total investments decreased slightly, moving from $7.11 billion at the end of June to $6.78 billion at the end of September. Warren Buffett’s Berkshire Hathaway is a big fan.
Philip Morris International, Inc. (PM): Hedge fund interest in PM increased during the third quarter. Of the hedge funds we track, 36 had had positions in the company at the end of the second quarter, at a total volume of $1.93 billion. At the end of the third quarter, 38 hedge funds has positions in the company, with a total volume of $2.21 billion. Jim Simons’ Renaissance Technologies had nearly $400 million in PM which contributed Renaissance’s amazing performance this year.
Altria Group (NYSE:MO): The number of hedge funds invested in MO also increased in the third quarter, moving from 25 at the end of June to 28 at the end of September. The collective volume of hedge fund interest in the company also went up, going from $440.35 million at the end of the second quarter to $518.95 million at the end of the third quarter. MO is the parent company of Philip Morris USA, Ste. Michelle Wine, Philip Morris Capital, pipe tobacco company John Middleton and the U.S. Smokeless Tobacco Company.
RockTenn Co. (RKT): The number of hedge funds with positions in RKT did not decrease from the second to the third quarter, but the volume of that investment decreased dramatically, going from $868.75 million to $453.34 million. This could be enough to shake some investors, but look who is buying the company – in this case, David Dreman’s Dreman Value Management and George Soros’ Soros Fund Management both initiated new positions in RKT during the third quarter.
ColgatePalmolive Co. (NYSE:CL): Of the hedge funds we track, 27 had positions in CL at the end of September, down from 28 at the end of June. The total volume of hedge fund investment in the company also decreased, moving from $2.14 billion to $1.82 billion. Jean-Marie Eveillard’s First Eagle Investment Management and Jim Simons’ Renaissance Technologies are both fans of the stock.
Estee Lauder Cos. Inc. (NYSE:EL): The number of hedge funds invested in EL moved from 25 hedge funds invested in the company at the end of the second quarter to 26 hedge funds invested at the end of the third quarter. The collective volume of hedge fund investment went down, moving from $1.49 billion at the end of June to $837.20 million at the end of September. Steve Mandel’s Lone Pine Capital and Andreas Halvorsen’s Viking Global both decreased their positions in the company during the third quarter, but even after those reductions they hold significant positions – respectively holding 1.31% and 1.38% of their portfolios in the company.
Energizer Holdings (NYSE:ENR): The number of hedge funds invested in ENR increased during the third quarter, moving from 20 at the end of June to close the third quarter at 25. The total volume of those investments decreased marginally, moving from $456.15 million to $449.14 million. Ken Griffin’s Citadel Investment Group upped its position in the company during the third quarter, as did Phill Gross and Robert Atchinson’s Adage Capital Management and Alexander Roepers’ Atlantic Investment Management.
Disclosure: I am long PM.