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The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on March 31st. We at Insider Monkey have made an extensive database of more than 866 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded ICON Public Limited Company (NASDAQ:ICLR) based on those filings.
ICON Public Limited Company (NASDAQ:ICLR) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 29 hedge funds' portfolios at the end of March. Our calculations also showed that ICLR isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare ICLR to other stocks including Pentair plc (NYSE:PNR), Molson Coors Beverage Company (NYSE:TAP), and MKS Instruments, Inc. (NASDAQ:MKSI) to get a better sense of its popularity.
In today’s marketplace there are many metrics investors employ to assess their holdings. Two of the less known metrics are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can outclass the market by a solid amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Michael Castor of Sio Capital
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Do Hedge Funds Think ICLR Is A Good Stock To Buy Now?
At first quarter's end, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the fourth quarter of 2020. On the other hand, there were a total of 21 hedge funds with a bullish position in ICLR 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.
Among these funds, Renaissance Technologies held the most valuable stake in ICON Public Limited Company (NASDAQ:ICLR), which was worth $406.4 million at the end of the fourth quarter. On the second spot was D E Shaw which amassed $62 million worth of shares. Montanaro Asset Management, Two Sigma Advisors, 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 Montanaro Asset Management allocated the biggest weight to ICON Public Limited Company (NASDAQ:ICLR), around 6.84% of its 13F portfolio. Fundsmith Long/Short Fund is also relatively very bullish on the stock, setting aside 3.03 percent of its 13F equity portfolio to ICLR.
Judging by the fact that ICON Public Limited Company (NASDAQ:ICLR) has witnessed a decline in interest from the smart money, it's safe to say that there were a few money managers that decided to sell off their entire stakes heading into Q2. Interestingly, Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital dropped the largest investment of the "upper crust" of funds followed by Insider Monkey, totaling about $7.8 million in stock, and Chuck Royce's Royce & Associates was right behind this move, as the fund said goodbye to about $5.9 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as ICON Public Limited Company (NASDAQ:ICLR) but similarly valued. We will take a look at Pentair plc (NYSE:PNR), Molson Coors Beverage Company (NYSE:TAP), MKS Instruments, Inc. (NASDAQ:MKSI), Dun & Bradstreet Corporation (NYSE:DNB), Dr. Reddy's Laboratories Limited (NYSE:RDY), Norwegian Cruise Line Holdings Ltd (NASDAQ:NCLH), and Hubbell Incorporated (NYSE:HUBB). This group of stocks' market valuations resemble ICLR's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PNR,30,775268,1 TAP,34,341099,-5 MKSI,22,512507,-5 DNB,29,835475,-3 RDY,12,180324,0 NCLH,34,576202,-6 HUBB,15,421137,-7 Average,25.1,520287,-3.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.1 hedge funds with bullish positions and the average amount invested in these stocks was $520 million. That figure was $731 million in ICLR's case. Molson Coors Beverage Company (NYSE:TAP) is the most popular stock in this table. On the other hand Dr. Reddy's Laboratories Limited (NYSE:RDY) is the least popular one with only 12 bullish hedge fund positions. ICON Public Limited Company (NASDAQ:ICLR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ICLR is 73.6. 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. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately ICLR wasn't nearly as popular as these 5 stocks and hedge funds that were betting on ICLR were disappointed as the stock returned 9.5% since the end of March (through 7/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.