Hedge funds are not perfect. They have their bad picks just like everyone else. Facebook, a stock hedge funds have loved dearly, lost nearly 40% of its value at one point in 2018. Although hedge funds are not perfect, their consensus picks do deliver solid returns, however. Our data show the top 20 S&P 500 stocks among hedge funds beat the S&P 500 Index by more than 8 percentage points so far in 2019. Because hedge funds have a lot of resources and their consensus picks do well, we pay attention to what they think. In this article, we analyze what the elite funds think of IQVIA Holdings, Inc. (NYSE:IQV).
Is IQVIA Holdings, Inc. (NYSE:IQV) a bargain? Money managers are reducing their bets on the stock. The number of long hedge fund bets fell by 3 lately. Our calculations also showed that IQV isn't among the 30 most popular stocks among hedge funds. IQV was in 64 hedge funds' portfolios at the end of September. There were 67 hedge funds in our database with IQV positions at the end of the previous quarter.
If you'd ask most traders, hedge funds are viewed as underperforming, outdated financial vehicles of yesteryear. While there are over 8000 funds trading today, Our researchers look at the upper echelon of this club, approximately 750 funds. It is estimated that this group of investors have their hands on bulk of the smart money's total asset base, and by tailing their unrivaled picks, Insider Monkey has figured out various investment strategies that have historically defeated Mr. Market. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per annum since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
[caption id="attachment_26869" align="aligncenter" width="600"] Larry Robbins of Glenview Capital[/caption]
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world's most bearish hedge fund that's more convinced than ever that a crash is coming, our long-short investment strategy doesn't rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds' buy/sell signals. We're going to analyze the key hedge fund action surrounding IQVIA Holdings, Inc. (NYSE:IQV).
Hedge fund activity in IQVIA Holdings, Inc. (NYSE:IQV)
Heading into the fourth quarter of 2019, a total of 64 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the previous quarter. By comparison, 48 hedge funds held shares or bullish call options in IQV a year ago. With the smart money's sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
More specifically, Glenview Capital was the largest shareholder of IQVIA Holdings, Inc. (NYSE:IQV), with a stake worth $540.4 million reported as of the end of September. Trailing Glenview Capital was Lone Pine Capital, which amassed a stake valued at $530.2 million. Farallon Capital, D E Shaw, and Third Point 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 Brahman Capital allocated the biggest weight to IQVIA Holdings, Inc. (NYSE:IQV), around 11.71% of its portfolio. Copernicus Capital Management is also relatively very bullish on the stock, designating 8.06 percent of its 13F equity portfolio to IQV.
Since IQVIA Holdings, Inc. (NYSE:IQV) has witnessed declining sentiment from the entirety of the hedge funds we track, we can see that there was a specific group of hedge funds who were dropping their full holdings heading into Q4. Intriguingly, John Lykouretzos's Hoplite Capital Management dumped the biggest stake of the 750 funds followed by Insider Monkey, totaling close to $38.2 million in stock. Brandon Haley's fund, Holocene Advisors, also said goodbye to its stock, about $18.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 3 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 Williams Companies, Inc. (NYSE:WMB), Southwest Airlines Co. (NYSE:LUV), Electronic Arts Inc. (NASDAQ:EA), and Amphenol Corporation (NYSE:APH). All of these stocks' market caps resemble IQV's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WMB,36,643068,2 LUV,36,3854849,3 EA,64,2089888,5 APH,31,758511,6 Average,41.75,1836579,4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 41.75 hedge funds with bullish positions and the average amount invested in these stocks was $1837 million. That figure was $4469 million in IQV's case. Electronic Arts Inc. (NASDAQ:EA) is the most popular stock in this table. On the other hand Amphenol Corporation (NYSE:APH) is the least popular one with only 31 bullish hedge fund positions. IQVIA Holdings, Inc. (NYSE:IQV) is the most popular stock in this group together with EA. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately IQV wasn't nearly as popular as these 20 stocks and hedge funds that were betting on IQV were disappointed as the stock returned -3.8% during the fourth quarter (through 11/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.