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In this article we will check out the progression of hedge fund sentiment towards Teleflex Incorporated (NYSE:TFX) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Teleflex Incorporated (NYSE:TFX) shareholders have witnessed an increase in support from the world's most elite money managers recently. Teleflex Incorporated (NYSE:TFX) was in 33 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 40. Our calculations also showed that TFX isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Kris Jenner of Rock Springs Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind let's analyze the latest hedge fund action surrounding Teleflex Incorporated (NYSE:TFX).
Do Hedge Funds Think TFX Is A Good Stock To Buy Now?
At Q1's end, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TFX over the last 23 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Teleflex Incorporated (NYSE:TFX) was held by Marshall Wace LLP, which reported holding $142.4 million worth of stock at the end of December. It was followed by Point72 Asset Management with a $59.2 million position. Other investors bullish on the company included Rock Springs Capital Management, Polar Capital, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Codex Capital allocated the biggest weight to Teleflex Incorporated (NYSE:TFX), around 3.09% of its 13F portfolio. Sectoral Asset Management is also relatively very bullish on the stock, dishing out 2.51 percent of its 13F equity portfolio to TFX.
As industrywide interest jumped, key money managers have jumped into Teleflex Incorporated (NYSE:TFX) headfirst. Alyeska Investment Group, managed by Anand Parekh, assembled the biggest position in Teleflex Incorporated (NYSE:TFX). Alyeska Investment Group had $27 million invested in the company at the end of the quarter. Bhagwan Jay Rao's Integral Health Asset Management also initiated a $5 million position during the quarter. The following funds were also among the new TFX investors: Ken Griffin's Citadel Investment Group, Greg Eisner's Engineers Gate Manager, and Jinghua Yan's TwinBeech Capital.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Teleflex Incorporated (NYSE:TFX) but similarly valued. We will take a look at KB Financial Group, Inc. (NYSE:KB), IAC/InterActiveCorp (NASDAQ:IAC), KeyCorp (NYSE:KEY), Hologic, Inc. (NASDAQ:HOLX), ZoomInfo Technologies Inc. (NASDAQ:ZI), Halliburton Company (NYSE:HAL), and DISH Network Corp. (NASDAQ:DISH). This group of stocks' market values resemble TFX's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KB,9,43761,4 IAC,63,2102112,-4 KEY,41,565404,12 HOLX,32,517383,-11 ZI,24,318610,-7 HAL,28,1015940,-3 DISH,51,2205763,-6 Average,35.4,966996,-2.1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 35.4 hedge funds with bullish positions and the average amount invested in these stocks was $967 million. That figure was $572 million in TFX's case. IAC/InterActiveCorp (NASDAQ:IAC) is the most popular stock in this table. On the other hand KB Financial Group, Inc. (NYSE:KB) is the least popular one with only 9 bullish hedge fund positions. Teleflex Incorporated (NYSE:TFX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TFX is 55. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.8% in 2021 through July 2nd and surpassed the market again by 6 percentage points. Unfortunately TFX wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); TFX investors were disappointed as the stock returned -1.2% since the end of March (through 7/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.