At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Syneos Health, Inc. (NASDAQ:SYNH).
Syneos Health, Inc. (NASDAQ:SYNH) was in 22 hedge funds' portfolios at the end of March. SYNH has seen an increase in hedge fund interest lately. There were 20 hedge funds in our database with SYNH holdings at the end of the previous quarter. Our calculations also showed that SYNH 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.
According to most stock holders, hedge funds are seen as unimportant, outdated financial tools of yesteryear. While there are more than 8000 funds trading today, We hone in on the elite of this group, about 850 funds. It is estimated that this group of investors orchestrate bulk of the hedge fund industry's total asset base, and by observing their highest performing stock picks, Insider Monkey has figured out many investment strategies that have historically beaten the broader indices. Insider Monkey's flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_30621" align="aligncenter" width="399"] Cliff Asness of AQR Capital Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example, we believe electric vehicles and energy storage are set to become giant markets, and we want to take advantage of the declining lithium prices amid the COVID-19 pandemic. So we are checking out investment opportunities like these. 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. Now let's view the new hedge fund action surrounding Syneos Health, Inc. (NASDAQ:SYNH).
How have hedgies been trading Syneos Health, Inc. (NASDAQ:SYNH)?
At Q1's end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the fourth quarter of 2019. By comparison, 26 hedge funds held shares or bullish call options in SYNH 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.
According to Insider Monkey's hedge fund database, Ken Griffin's Citadel Investment Group has the biggest position in Syneos Health, Inc. (NASDAQ:SYNH), worth close to $34.6 million, corresponding to less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Amy Minella of Cardinal Capital, with a $27.6 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Some other members of the smart money with similar optimism consist of Israel Englander's Millennium Management, D. E. Shaw's D E Shaw and Cliff Asness's AQR Capital Management. In terms of the portfolio weights assigned to each position Cardinal Capital allocated the biggest weight to Syneos Health, Inc. (NASDAQ:SYNH), around 1.36% of its 13F portfolio. Sio Capital is also relatively very bullish on the stock, earmarking 1.02 percent of its 13F equity portfolio to SYNH.
As one would reasonably expect, specific money managers were breaking ground themselves. Holocene Advisors, managed by Brandon Haley, assembled the biggest position in Syneos Health, Inc. (NASDAQ:SYNH). Holocene Advisors had $6.3 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital also initiated a $4.9 million position during the quarter. The following funds were also among the new SYNH investors: Robert B. Gillam's McKinley Capital Management, Peter Muller's PDT Partners, and Joel Greenblatt's Gotham Asset Management.
Let's now take a look at 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 The Mosaic Company (NYSE:MOS), 51job, Inc. (NASDAQ:JOBS), Teck Resources Ltd (NYSE:TECK), and Churchill Downs Incorporated (NASDAQ:CHDN). This group of stocks' market valuations match SYNH's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MOS,29,386708,0 JOBS,9,18622,1 TECK,24,259343,-6 CHDN,31,444952,-1 Average,23.25,277406,-1.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.25 hedge funds with bullish positions and the average amount invested in these stocks was $277 million. That figure was $132 million in SYNH's case. Churchill Downs Incorporated (NASDAQ:CHDN) is the most popular stock in this table. On the other hand 51job, Inc. (NASDAQ:JOBS) is the least popular one with only 9 bullish hedge fund positions. Syneos Health, Inc. (NASDAQ:SYNH) is not the least popular stock in this group but hedge fund interest is still below 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 13.9% in 2020 through June 10th and still beat the market by 14.2 percentage points. A small number of hedge funds were also right about betting on SYNH as the stock returned 44.6% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.