In this article you are going to find out whether hedge funds think IDEX Corporation (NYSE:IEX) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Is IDEX Corporation (NYSE:IEX) a buy here? The smart money is in an optimistic mood. The number of long hedge fund bets improved by 10 recently. Our calculations also showed that IEX 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). IEX was in 33 hedge funds' portfolios at the end of March. There were 23 hedge funds in our database with IEX positions at the end of the previous quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are tons of tools shareholders can use to value stocks. A pair of the less known tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the top investment managers can outperform the market by a very impressive amount (see the details here).
[caption id="attachment_258232" align="aligncenter" width="393"] Mario Gabelli of GAMCO Investors[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. 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. Keeping this in mind let's check out the latest hedge fund action regarding IDEX Corporation (NYSE:IEX).
What have hedge funds been doing with IDEX Corporation (NYSE:IEX)?
At the end of the first quarter, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 43% from one quarter earlier. By comparison, 16 hedge funds held shares or bullish call options in IEX a year ago. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Impax Asset Management held the most valuable stake in IDEX Corporation (NYSE:IEX), which was worth $261.9 million at the end of the third quarter. On the second spot was GAMCO Investors which amassed $46.9 million worth of shares. Renaissance Technologies, Millennium Management, and Marshall Wace LLP 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 Impax Asset Management allocated the biggest weight to IDEX Corporation (NYSE:IEX), around 3.49% of its 13F portfolio. Jade Capital Advisors is also relatively very bullish on the stock, earmarking 2.61 percent of its 13F equity portfolio to IEX.
With a general bullishness amongst the heavyweights, key money managers have jumped into IDEX Corporation (NYSE:IEX) headfirst. Select Equity Group, managed by Robert Joseph Caruso, initiated the most outsized position in IDEX Corporation (NYSE:IEX). Select Equity Group had $21.2 million invested in the company at the end of the quarter. Robert Pohly's Samlyn Capital also made a $20.3 million investment in the stock during the quarter. The other funds with new positions in the stock are Greg Poole's Echo Street Capital Management, Wallace Weitz's Wallace R. Weitz & Co., and D. E. Shaw's D E Shaw.
Let's now review hedge fund activity in other stocks similar to IDEX Corporation (NYSE:IEX). These stocks are Roku, Inc. (NASDAQ:ROKU), Bio-Rad Laboratories, Inc. (NYSE:BIO), Equity Lifestyle Properties, Inc. (NYSE:ELS), and DISH Network Corp. (NASDAQ:DISH). This group of stocks' market values are similar to IEX's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ROKU,35,182267,1 BIO,39,874653,-5 ELS,31,452058,8 DISH,44,862996,3 Average,37.25,592994,1.75 [/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 $593 million. That figure was $535 million in IEX's case. DISH Network Corp. (NASDAQ:DISH) is the most popular stock in this table. On the other hand Equity Lifestyle Properties, Inc. (NYSE:ELS) is the least popular one with only 31 bullish hedge fund positions. IDEX Corporation (NYSE:IEX) is not the least popular stock in this group but hedge fund interest is still below average. 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 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 8.3% in 2020 through the end of May and surpassed the market by 13.2 percentage points. Unfortunately IEX wasn't nearly as popular as these 10 stocks (hedge fund sentiment was quite bearish); IEX investors were disappointed as the stock returned 15.8% during 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.
Disclosure: None. This article was originally published at Insider Monkey.