Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren't timid and registered double digit market beating gains. Financials, energy and industrial stocks aren't doing great but many of the stocks that delivered strong returns since March are still going very strong and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment to Integra Lifesciences Holdings Corp (NASDAQ:IART) changed recently.
Is IART a good stock to buy now? Integra Lifesciences Holdings Corp (NASDAQ:IART) has experienced a decrease in hedge fund sentiment lately. Integra Lifesciences Holdings Corp (NASDAQ:IART) was in 16 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistic is 23. There were 23 hedge funds in our database with IART holdings at the end of June. Our calculations also showed that IART isn't among the 30 most popular stocks among hedge funds (click for Q3 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 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 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.
Lee Ainslie of Maverick Capital
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. With all of this in mind let's view the key hedge fund action surrounding Integra Lifesciences Holdings Corp (NASDAQ:IART).
Do Hedge Funds Think IART Is A Good Stock To Buy Now?
At Q3's end, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -30% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards IART over the last 21 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Ken Fisher's Fisher Asset Management has the number one position in Integra Lifesciences Holdings Corp (NASDAQ:IART), worth close to $31.8 million, amounting to less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is D E Shaw, led by D. E. Shaw, holding a $15.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions comprise Vishal Saluja and Pham Quang's Endurant Capital Management, Cliff Asness's AQR Capital Management and Israel Englander's Millennium Management. In terms of the portfolio weights assigned to each position Endurant Capital Management allocated the biggest weight to Integra Lifesciences Holdings Corp (NASDAQ:IART), around 3.93% of its 13F portfolio. Engineers Gate Manager is also relatively very bullish on the stock, designating 0.07 percent of its 13F equity portfolio to IART.
Seeing as Integra Lifesciences Holdings Corp (NASDAQ:IART) has experienced falling interest from the smart money, it's safe to say that there is a sect of fund managers who sold off their full holdings heading into Q4. At the top of the heap, Ian Simm's Impax Asset Management said goodbye to the biggest position of the "upper crust" of funds monitored by Insider Monkey, comprising an estimated $6.3 million in stock. Donald Sussman's fund, Paloma Partners, also sold off its stock, about $3.6 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 7 funds heading into Q4.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Integra Lifesciences Holdings Corp (NASDAQ:IART) but similarly valued. We will take a look at Allison Transmission Holdings Inc (NYSE:ALSN), Wright Medical Group N.V. (NASDAQ:WMGI), Medpace Holdings, Inc. (NASDAQ:MEDP), Healthequity Inc (NASDAQ:HQY), YETI Holdings, Inc. (NYSE:YETI), Cirrus Logic, Inc. (NASDAQ:CRUS), and First Financial Bankshares Inc (NASDAQ:FFIN). This group of stocks' market values are closest to IART's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ALSN,30,584604,-2 WMGI,40,1066141,2 MEDP,31,309579,9 HQY,24,225566,6 YETI,29,121199,7 CRUS,26,357380,-7 FFIN,17,26509,-1 Average,28.1,384425,2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 28.1 hedge funds with bullish positions and the average amount invested in these stocks was $384 million. That figure was $91 million in IART's case. Wright Medical Group N.V. (NASDAQ:WMGI) is the most popular stock in this table. On the other hand First Financial Bankshares Inc (NASDAQ:FFIN) is the least popular one with only 17 bullish hedge fund positions. Compared to these stocks Integra Lifesciences Holdings Corp (NASDAQ:IART) is even less popular than FFIN. Our overall hedge fund sentiment score for IART is 18.9. 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. Hedge funds clearly dropped the ball on IART as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on IART as the stock returned 21.8% since Q3 (through December 14th) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.