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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on September 30th, about a month before the elections. We at Insider Monkey have made an extensive database of more than 817 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Agilent Technologies Inc. (NYSE:A) based on those filings.
Is Agilent a good stock to buy now? Agilent Technologies Inc. (NYSE:A) was in 39 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 52. A has experienced an increase in activity from the world's largest hedge funds lately. There were 38 hedge funds in our database with A holdings at the end of June. Our calculations also showed that A isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 website. Now we're going to analyze the key hedge fund action regarding Agilent Technologies Inc. (NYSE:A).
Do Hedge Funds Think A Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 39 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards A over the last 21 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Pershing Square held the most valuable stake in Agilent Technologies Inc. (NYSE:A), which was worth $1236.4 million at the end of the third quarter. On the second spot was Cantillon Capital Management which amassed $415.6 million worth of shares. Impax Asset Management, BlueSpruce Investments, and D E Shaw were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Pershing Square allocated the biggest weight to Agilent Technologies Inc. (NYSE:A), around 14.01% of its 13F portfolio. BlueSpruce Investments is also relatively very bullish on the stock, setting aside 6.63 percent of its 13F equity portfolio to A.
As one would reasonably expect, key hedge funds were leading the bulls' herd. Two Sigma Advisors, managed by John Overdeck and David Siegel, established the most valuable position in Agilent Technologies Inc. (NYSE:A). Two Sigma Advisors had $1.2 million invested in the company at the end of the quarter. Benjamin A. Smith's Laurion Capital Management also made a $0.7 million investment in the stock during the quarter. The other funds with brand new A positions are Bruce Kovner's Caxton Associates LP, Alec Litowitz and Ross Laser's Magnetar Capital, and Michael Gelband's ExodusPoint Capital.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Agilent Technologies Inc. (NYSE:A) but similarly valued. We will take a look at Datadog, Inc. (NASDAQ:DDOG), Banco Santander, S.A. (NYSE:SAN), WEC Energy Group, Inc. (NYSE:WEC), The Bank of New York Mellon Corporation (NYSE:BK), Johnson Controls International plc (NYSE:JCI), Banco Bradesco SA (NYSE:BBD), and Splunk Inc (NASDAQ:SPLK). This group of stocks' market values match A's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position DDOG,42,2604703,-15 SAN,14,232246,-2 WEC,22,237741,-8 BK,48,3728518,0 JCI,24,892177,-4 BBD,20,213273,2 SPLK,44,1031842,-5 Average,30.6,1277214,-4.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.6 hedge funds with bullish positions and the average amount invested in these stocks was $1277 million. That figure was $3221 million in A's case. The Bank of New York Mellon Corporation (NYSE:BK) is the most popular stock in this table. On the other hand Banco Santander, S.A. (NYSE:SAN) is the least popular one with only 14 bullish hedge fund positions. Agilent Technologies Inc. (NYSE:A) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for A is 65.3. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on A as the stock returned 18.4% since the end of Q3 (through 12/18) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.