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Hedge Funds Kept Selling IQVIA Holdings, Inc. (IQV) During The Crash

Asma UL Husna

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. In this article we look at what those investors think of IQVIA Holdings, Inc. (NYSE:IQV).

IQVIA Holdings, Inc. (NYSE:IQV) was in 60 hedge funds' portfolios at the end of March. IQV has seen a decrease in activity from the world's largest hedge funds lately. There were 64 hedge funds in our database with IQV holdings at the end of the previous quarter. Our calculations also showed that IQV 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.

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 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

[caption id="attachment_26869" align="aligncenter" width="397"] Larry Robbins of Glenview Capital[/caption]

GLENVIEW CAPITAL

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, Europe is set to become the world’s largest cannabis market, so we checked out this European marijuana stock pitch. Also, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this analyst’s “corona catalyst plays“.  We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we're going to take a gander at the latest hedge fund action encompassing IQVIA Holdings, Inc. (NYSE:IQV).

How are hedge funds trading IQVIA Holdings, Inc. (NYSE:IQV)?

At the end of the first quarter, a total of 60 of the hedge funds tracked by Insider Monkey were long this stock, a change of -6% from the fourth quarter of 2019. By comparison, 64 hedge funds held shares or bullish call options in IQV a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in IQVIA Holdings, Inc. (NYSE:IQV) was held by Farallon Capital, which reported holding $403.4 million worth of stock at the end of September. It was followed by Steadfast Capital Management with a $307.7 million position. Other investors bullish on the company included Third Point, D E Shaw, and Glenview Capital. In terms of the portfolio weights assigned to each position RIT Capital Partners allocated the biggest weight to IQVIA Holdings, Inc. (NYSE:IQV), around 18.86% of its 13F portfolio. Cowbird Capital is also relatively very bullish on the stock, setting aside 16.2 percent of its 13F equity portfolio to IQV.

Since IQVIA Holdings, Inc. (NYSE:IQV) has experienced a decline in interest from the entirety of the hedge funds we track, logic holds that there were a few hedge funds who sold off their full holdings heading into Q4. Interestingly, Lone Pine Capital dumped the biggest position of the 750 funds monitored by Insider Monkey, valued at about $476.2 million in stock. Steve Cohen's fund, Point72 Asset Management, also dropped its stock, about $145.3 million worth. These transactions are interesting, as total hedge fund interest was cut by 4 funds heading into Q4.

Let's go over hedge fund activity in other stocks - not necessarily in the same industry as IQVIA Holdings, Inc. (NYSE:IQV) but similarly valued. These stocks are ZTO Express (Cayman) Inc. (NYSE:ZTO), AvalonBay Communities Inc (NYSE:AVB), Prudential Financial Inc (NYSE:PRU), and Sea Limited (NYSE:SE). This group of stocks' market values resemble IQV's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ZTO,15,562997,1 AVB,30,377394,7 PRU,28,367179,-8 SE,76,3132301,0 Average,37.25,1109968,0 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 37.25 hedge funds with bullish positions and the average amount invested in these stocks was $1110 million. That figure was $2474 million in IQV's case. Sea Limited (NYSE:SE) is the most popular stock in this table. On the other hand ZTO Express (Cayman) Inc. (NYSE:ZTO) is the least popular one with only 15 bullish hedge fund positions. IQVIA Holdings, Inc. (NYSE:IQV) 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 7.9% in 2020 through May 22nd but still beat the market by 15.6 percentage points. Hedge funds were also right about betting on IQV as the stock returned 32.5% in Q2 (through May 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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

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