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 817 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 September 30th, about a month before the elections. In this article we look at what those investors think of Fortive Corporation (NYSE:FTV).
Is FTV a good stock to buy? Hedge funds were selling. The number of bullish hedge fund bets fell by 1 lately. Fortive Corporation (NYSE:FTV) was in 34 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 46. Our calculations also showed that FTV 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.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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.
Dmitry Balyasny of Balyasny Asset Management
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. Keeping this in mind let's take a glance at the key hedge fund action surrounding Fortive Corporation (NYSE:FTV).
Do Hedge Funds Think FTV Is A Good Stock To Buy Now?
At the end of September, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from the previous quarter. The graph below displays the number of hedge funds with bullish position in FTV over the last 21 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Andreas Halvorsen's Viking Global has the largest position in Fortive Corporation (NYSE:FTV), worth close to $519.5 million, accounting for 1.9% of its total 13F portfolio. Coming in second is Phill Gross and Robert Atchinson of Adage Capital Management, with a $236.7 million position; 0.6% of its 13F portfolio is allocated to the stock. Other members of the smart money with similar optimism encompass Dan Loeb's Third Point, Brandon Haley's Holocene Advisors and D. E. Shaw's D E Shaw. In terms of the portfolio weights assigned to each position Third Point allocated the biggest weight to Fortive Corporation (NYSE:FTV), around 2.29% of its 13F portfolio. Viking Global is also relatively very bullish on the stock, earmarking 1.88 percent of its 13F equity portfolio to FTV.
Because Fortive Corporation (NYSE:FTV) has witnessed bearish sentiment from the smart money, logic holds that there lies a certain "tier" of hedge funds who sold off their entire stakes by the end of the third quarter. Intriguingly, Dmitry Balyasny's Balyasny Asset Management dumped the largest stake of the "upper crust" of funds followed by Insider Monkey, valued at an estimated $32 million in stock, and Alexander Mitchell's Scopus Asset Management was right behind this move, as the fund dropped about $10.8 million worth. These bearish behaviors are interesting, as total hedge fund interest dropped by 1 funds by the end of the third quarter.
Let's now review hedge fund activity in other stocks similar to Fortive Corporation (NYSE:FTV). We will take a look at Rockwell Automation Inc. (NYSE:ROK), Royalty Pharma Plc (NASDAQ:RPRX), Lennar Corporation (NYSE:LEN), Xilinx, Inc. (NASDAQ:XLNX), Prudential Financial Inc (NYSE:PRU), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), and Pinterest, Inc. (NYSE:PINS). All of these stocks' market caps are closest to FTV's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ROK,44,521128,-6 RPRX,20,2901046,-4 LEN,60,1740218,5 XLNX,46,1198711,-1 PRU,34,479419,8 ALXN,58,3776330,1 PINS,80,3484050,27 Average,48.9,2014415,4.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 48.9 hedge funds with bullish positions and the average amount invested in these stocks was $2014 million. That figure was $1620 million in FTV's case. Pinterest, Inc. (NYSE:PINS) is the most popular stock in this table. On the other hand Royalty Pharma Plc (NASDAQ:RPRX) is the least popular one with only 20 bullish hedge fund positions. Fortive Corporation (NYSE:FTV) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for FTV is 37.8. 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. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 surpassed the market again by 16.4 percentage points. Unfortunately FTV wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); FTV investors were disappointed as the stock returned 9.6% since the end of September (through 12/18) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.