The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Roper Technologies Inc. (NYSE:ROP) and determine whether the smart money was really smart about this stock.
Roper Technologies Inc. (NYSE:ROP) was in 38 hedge funds' portfolios at the end of March. ROP shareholders have witnessed a decrease in hedge fund interest in recent months. There were 40 hedge funds in our database with ROP positions at the end of the previous quarter. Our calculations also showed that ROP isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
To most shareholders, hedge funds are seen as unimportant, outdated investment vehicles of yesteryear. While there are greater than 8000 funds trading at the moment, Our researchers hone in on the crème de la crème of this group, around 850 funds. These money managers administer most of the hedge fund industry's total capital, and by observing their finest investments, Insider Monkey has unsheathed a number of investment strategies that have historically defeated the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_26397" align="aligncenter" width="400"] Ray Dalio of Bridgewater Associates[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so we are checking out this tiny lithium stock. With all of this in mind we're going to take a glance at the new hedge fund action regarding Roper Technologies Inc. (NYSE:ROP).
What have hedge funds been doing with Roper Technologies Inc. (NYSE:ROP)?
At Q1's end, a total of 38 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ROP over the last 18 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Akre Capital Management held the most valuable stake in Roper Technologies Inc. (NYSE:ROP), which was worth $531.7 million at the end of the third quarter. On the second spot was Third Point which amassed $85.7 million worth of shares. Alyeska Investment Group, Bristol Gate Capital Partners, and Point72 Asset Management 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 Lansing Management allocated the biggest weight to Roper Technologies Inc. (NYSE:ROP), around 18.74% of its 13F portfolio. Waratah Capital Advisors is also relatively very bullish on the stock, dishing out 6.09 percent of its 13F equity portfolio to ROP.
Because Roper Technologies Inc. (NYSE:ROP) has faced a decline in interest from the smart money, we can see that there exists a select few hedgies that slashed their full holdings heading into Q4. Interestingly, Renaissance Technologies dropped the biggest investment of the 750 funds followed by Insider Monkey, comprising about $34.8 million in stock, and Dmitry Balyasny's Balyasny Asset Management was right behind this move, as the fund dumped about $24.9 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 2 funds heading into Q4.
Let's go over hedge fund activity in other stocks similar to Roper Technologies Inc. (NYSE:ROP). We will take a look at Sempra Energy (NYSE:SRE), Analog Devices, Inc. (NASDAQ:ADI), Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG), and Banco Bradesco SA (NYSE:BBD). All of these stocks' market caps are similar to ROP's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SRE,27,505194,-8 ADI,45,1979695,-6 SMFG,10,104520,-1 BBD,15,246087,-3 Average,24.25,708874,-4.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.25 hedge funds with bullish positions and the average amount invested in these stocks was $709 million. That figure was $1016 million in ROP's case. Analog Devices, Inc. (NASDAQ:ADI) is the most popular stock in this table. On the other hand Sumitomo Mitsui Financial Grp, Inc. (NYSE:SMFG) is the least popular one with only 10 bullish hedge fund positions. Roper Technologies Inc. (NYSE:ROP) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but still beat the market by 15.5 percentage points. Hedge funds were also right about betting on ROP, though not to the same extent, as the stock returned 24.7% during the second quarter and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.