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Is LIVN Stock A Buy or Sell?

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Abigail Fisher
·5 min read
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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 887 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of December 31st. In this article we look at what those investors think of LivaNova PLC (NASDAQ:LIVN).

Is LIVN stock a buy? Hedge funds were taking an optimistic view. The number of bullish hedge fund bets improved by 4 recently. LivaNova PLC (NASDAQ:LIVN) was in 30 hedge funds' portfolios at the end of December. The all time high for this statistic is 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that LIVN isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).

David Brown Hawk Ridge Partners
David Brown Hawk Ridge Partners

David Brown of Hawk Ridge Management

Keeping this in mind we're going to go over the latest hedge fund action regarding LivaNova PLC (NASDAQ:LIVN).

Do Hedge Funds Think LIVN Is A Good Stock To Buy Now?

At fourth quarter's end, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 15% from the previous quarter. On the other hand, there were a total of 22 hedge funds with a bullish position in LIVN 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.

More specifically, Maverick Capital was the largest shareholder of LivaNova PLC (NASDAQ:LIVN), with a stake worth $110.5 million reported as of the end of December. Trailing Maverick Capital was Paradice Investment Management, which amassed a stake valued at $81.6 million. Hawk Ridge Management, Diamond Hill Capital, and Millennium Management 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 Hawk Ridge Management allocated the biggest weight to LivaNova PLC (NASDAQ:LIVN), around 4.66% of its 13F portfolio. Paradice Investment Management is also relatively very bullish on the stock, earmarking 4.58 percent of its 13F equity portfolio to LIVN.

As aggregate interest increased, key money managers were leading the bulls' herd. Hawk Ridge Management, managed by David Brown, created the most valuable position in LivaNova PLC (NASDAQ:LIVN). Hawk Ridge Management had $57.6 million invested in the company at the end of the quarter. Arthur B Cohen and Joseph Healey's Healthcor Management LP also made a $40.8 million investment in the stock during the quarter. The following funds were also among the new LIVN investors: Phill Gross and Robert Atchinson's Adage Capital Management, Efrem Kamen's Pura Vida Investments, and Roberto Mignone's Bridger Management.

Let's now review hedge fund activity in other stocks similar to LivaNova PLC (NASDAQ:LIVN). These stocks are Home Bancshares Inc. (Conway, AR) (NASDAQ:HOMB), Univar Solutions Inc (NYSE:UNVR), Pactiv Evergreen Inc. (NASDAQ:PTVE), BankUnited Inc (NYSE:BKU), AMN Healthcare Services Inc (NYSE:AMN), CONMED Corporation (NYSE:CNMD), and ALX Oncology Holdings Inc. (NASDAQ:ALXO). All of these stocks' market caps match LIVN's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HOMB,12,37950,-2 UNVR,31,712512,1 PTVE,7,118932,-8 BKU,11,121421,-3 AMN,13,32646,-3 CNMD,28,242536,-5 ALXO,15,901879,6 Average,16.7,309697,-2 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.7 hedge funds with bullish positions and the average amount invested in these stocks was $310 million. That figure was $547 million in LIVN's case. Univar Solutions Inc (NYSE:UNVR) is the most popular stock in this table. On the other hand Pactiv Evergreen Inc. (NASDAQ:PTVE) is the least popular one with only 7 bullish hedge fund positions. LivaNova PLC (NASDAQ:LIVN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LIVN is 86.9. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Hedge funds were also right about betting on LIVN as the stock returned 22.3% since the end of Q4 (through 4/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.

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