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Hedge Funds Are Crazy About Syneos Health, Inc. (SYNH

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We at Insider Monkey have gone over 873 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th. In this article, we look at what those funds think of Syneos Health, Inc. (NASDAQ:SYNH) based on that data.

Syneos Health, Inc. (NASDAQ:SYNH) was in 33 hedge funds' portfolios at the end of June. The all time high for this statistic is 40. SYNH has seen an increase in hedge fund sentiment in recent months. There were 28 hedge funds in our database with SYNH positions at the end of the first quarter. Our calculations also showed that SYNH isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Michael Lowenstein Kensico Capital
Michael Lowenstein Kensico Capital

Michael Lowenstein of Kensico Capital

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 check out the recent hedge fund action regarding Syneos Health, Inc. (NASDAQ:SYNH).

Do Hedge Funds Think SYNH Is A Good Stock To Buy Now?

At Q2's end, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from the previous quarter. By comparison, 29 hedge funds held shares or bullish call options in SYNH a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Rajiv Jain's GQG Partners has the biggest position in Syneos Health, Inc. (NASDAQ:SYNH), worth close to $98.2 million, accounting for 0.3% of its total 13F portfolio. The second most bullish fund manager is Cardinal Capital, managed by Amy Minella, which holds a $84.7 million position; 2% of its 13F portfolio is allocated to the stock. Remaining professional money managers with similar optimism consist of Brian Ashford-Russell and Tim Woolley's Polar Capital, Israel Englander's Millennium Management and Anthony Bozza's Lakewood Capital Management. In terms of the portfolio weights assigned to each position Endurant Capital Management allocated the biggest weight to Syneos Health, Inc. (NASDAQ:SYNH), around 3.2% of its 13F portfolio. Pinz Capital is also relatively very bullish on the stock, earmarking 2.69 percent of its 13F equity portfolio to SYNH.

As industrywide interest jumped, key money managers were leading the bulls' herd. Kensico Capital, managed by Michael Lowenstein, established the most outsized position in Syneos Health, Inc. (NASDAQ:SYNH). Kensico Capital had $29.1 million invested in the company at the end of the quarter. Jerome Pfund and Michael Sjostrom's Sectoral Asset Management also made a $24.3 million investment in the stock during the quarter. The other funds with brand new SYNH positions are Michael Rockefeller and KarláKroeker's Woodline Partners, Mikal Patel's Oribel Capital Management, and Paul Marshall and Ian Wace's Marshall Wace LLP.

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Syneos Health, Inc. (NASDAQ:SYNH) but similarly valued. We will take a look at Manhattan Associates, Inc. (NASDAQ:MANH), Neurocrine Biosciences, Inc. (NASDAQ:NBIX), Albertsons Companies, Inc. (NYSE:ACI), Sensata Technologies Holding plc (NYSE:ST), Federal Realty Investment Trust (NYSE:FRT), Algonquin Power & Utilities Corp. (NYSE:AQN), and BridgeBio Pharma, Inc. (NASDAQ:BBIO). This group of stocks' market valuations are similar to SYNH's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MANH,28,408526,0 NBIX,32,900271,13 ACI,20,2910547,1 ST,32,1822315,-4 FRT,16,86746,0 AQN,24,310750,14 BBIO,27,2790433,1 Average,25.6,1318513,3.6 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.6 hedge funds with bullish positions and the average amount invested in these stocks was $1319 million. That figure was $670 million in SYNH's case. Neurocrine Biosciences, Inc. (NASDAQ:NBIX) is the most popular stock in this table. On the other hand Federal Realty Investment Trust (NYSE:FRT) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Syneos Health, Inc. (NASDAQ:SYNH) is more popular among hedge funds. Our overall hedge fund sentiment score for SYNH is 84.8. 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. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Unfortunately SYNH wasn't nearly as popular as these 5 stocks and hedge funds that were betting on SYNH were disappointed as the stock returned -2% since the end of the second quarter (through 10/15) 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 since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.