We can judge whether Henry Schein, Inc. (NASDAQ:HSIC) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market when we factor in known risk factors.
Henry Schein, Inc. (NASDAQ:HSIC) has experienced an increase in enthusiasm from smart money recently. HSIC was in 27 hedge funds' portfolios at the end of the fourth quarter of 2018. There were 22 hedge funds in our database with HSIC holdings at the end of the previous quarter. Our calculations also showed that HSIC isn't among the 30 most popular stocks among hedge funds.
Today there are tons of formulas shareholders can use to size up their stock investments. Two of the less known formulas are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can trounce the market by a superb margin (see the details here).
We're going to analyze the fresh hedge fund action regarding Henry Schein, Inc. (NASDAQ:HSIC).
What does the smart money think about Henry Schein, Inc. (NASDAQ:HSIC)?
Heading into the first quarter of 2019, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 23% from the second quarter of 2018. By comparison, 24 hedge funds held shares or bullish call options in HSIC a year ago. With hedge funds' capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Generation Investment Management, managed by David Blood and Al Gore, holds the largest position in Henry Schein, Inc. (NASDAQ:HSIC). Generation Investment Management has a $982 million position in the stock, comprising 8.2% of its 13F portfolio. Coming in second is Select Equity Group, led by Robert Joseph Caruso, holding a $403.6 million position; the fund has 3% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism consist of Cliff Asness's AQR Capital Management, Mario Gabelli's GAMCO Investors and John Lykouretzos's Hoplite Capital Management.
Consequently, some big names were leading the bulls' herd. Gotham Asset Management, managed by Joel Greenblatt, initiated the most outsized position in Henry Schein, Inc. (NASDAQ:HSIC). Gotham Asset Management had $9.5 million invested in the company at the end of the quarter. Ray Dalio's Bridgewater Associates also initiated a $1.4 million position during the quarter. The other funds with brand new HSIC positions are Dmitry Balyasny's Balyasny Asset Management, Benjamin A. Smith's Laurion Capital Management, and Matthew Hulsizer's PEAK6 Capital Management.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Henry Schein, Inc. (NASDAQ:HSIC) but similarly valued. These stocks are Garmin Ltd. (NASDAQ:GRMN), ANSYS, Inc. (NASDAQ:ANSS), Marathon Oil Corporation (NYSE:MRO), and Skyworks Solutions Inc (NASDAQ:SWKS). This group of stocks' market values resemble HSIC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GRMN,31,274275,4 ANSS,29,733810,3 MRO,37,746125,-2 SWKS,32,666763,7 Average,32.25,605243,3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.25 hedge funds with bullish positions and the average amount invested in these stocks was $605 million. That figure was $1605 million in HSIC's case. Marathon Oil Corporation (NYSE:MRO) is the most popular stock in this table. On the other hand ANSYS, Inc. (NASDAQ:ANSS) is the least popular one with only 29 bullish hedge fund positions. Compared to these stocks Henry Schein, Inc. (NASDAQ:HSIC) is even less popular than ANSS. Considering that hedge funds aren't fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn't behind this stock. This isn't necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. Our calculations showed that top 15 most popular stocks among hedge funds returned 19.7% through March 15th and outperformed the S&P 500 ETF (SPY) by 6.6 percentage points. Unfortunately HSIC wasn't in this group. Hedge funds that bet on HSIC were disappointed as the stock lost 3.7% and underperformed the market. If you are interested in investing in large cap stocks, you should check out the top 15 hedge fund stocks as 13 of these outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.