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The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 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 June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought IQVIA Holdings, Inc. (NYSE:IQV) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
IQVIA Holdings, Inc. (NYSE:IQV) investors should pay attention to an increase in activity from the world's largest hedge funds of late. IQVIA Holdings, Inc. (NYSE:IQV) was in 66 hedge funds' portfolios at the end of the second quarter of 2020. The all time high for this statistics is 68. Our calculations also showed that IQV isn't among the 30 most popular stocks among hedge funds (click for Q2 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 56 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 34% through August 17th. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Dan Loeb of Third Point
At Insider Monkey we scour multiple sources to uncover the next great investment idea. Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this junior gold mining stock.. We go through lists like the 10 most profitable companies in America 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. Now let's take a gander at the latest hedge fund action encompassing IQVIA Holdings, Inc. (NYSE:IQV).
How have hedgies been trading IQVIA Holdings, Inc. (NYSE:IQV)?
At Q2's end, a total of 66 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the previous quarter. On the other hand, there were a total of 67 hedge funds with a bullish position in IQV a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Farallon Capital was the largest shareholder of IQVIA Holdings, Inc. (NYSE:IQV), with a stake worth $538.6 million reported as of the end of September. Trailing Farallon Capital was Steadfast Capital Management, which amassed a stake valued at $391.1 million. Third Point, D E Shaw, and Citadel Investment Group 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 RIT Capital Partners allocated the biggest weight to IQVIA Holdings, Inc. (NYSE:IQV), around 19.78% of its 13F portfolio. Cowbird Capital is also relatively very bullish on the stock, designating 13.68 percent of its 13F equity portfolio to IQV.
As one would reasonably expect, some big names have been driving this bullishness. Alyeska Investment Group, managed by Anand Parekh, established the most valuable position in IQVIA Holdings, Inc. (NYSE:IQV). Alyeska Investment Group had $40.8 million invested in the company at the end of the quarter. Kevin Molloy's Iron Triangle Partners also initiated a $19.5 million position during the quarter. The following funds were also among the new IQV investors: David Zorub's Parsifal Capital Management, Greg Poole's Echo Street Capital Management, and Simon Sadler's Segantii Capital.
Let's now review hedge fund activity in other stocks similar to IQVIA Holdings, Inc. (NYSE:IQV). We will take a look at The Hershey Company (NYSE:HSY), CRH PLC (NYSE:CRH), ING Groep N.V. (NYSE:ING), TE Connectivity Ltd. (NYSE:TEL), American International Group Inc (NYSE:AIG), Cadence Design Systems Inc (NASDAQ:CDNS), and The Kroger Co. (NYSE:KR). This group of stocks' market values are similar to IQV's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HSY,39,1028323,6 CRH,7,76935,-3 ING,13,385807,0 TEL,39,2000251,6 AIG,40,2028685,-3 CDNS,39,1090501,8 KR,41,2361525,-2 Average,31.1,1281718,1.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.1 hedge funds with bullish positions and the average amount invested in these stocks was $1282 million. That figure was $3023 million in IQV's case. The Kroger Co. (NYSE:KR) is the most popular stock in this table. On the other hand CRH PLC (NYSE:CRH) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks IQVIA Holdings, Inc. (NYSE:IQV) is more popular among hedge funds. Our overall hedge fund sentiment score for IQV is 89.1. 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 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 28.2% in 2020 through August 24th and still beat the market by 20.6 percentage points. Unfortunately IQV wasn't nearly as popular as these 10 stocks and hedge funds that were betting on IQV were disappointed as the stock returned 10.1% since the end of the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 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.