Looking for high-potential stocks? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 7.6% in the 12 months ending November 21, with more than 51% of the stocks in the index failing to beat the benchmark. Therefore, the odds that one will pin down a winner by randomly picking a stock are less than the odds in a fair coin-tossing game. Conversely, best performing hedge funds’ 30 preferred mid-cap stocks generated a return of 18% during the same 12-month period. Coincidence? It might happen to be so, but it is unlikely. Our research covering a 17-year period indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like IMS Health Holdings Inc (NYSE:IMS) .
IMS Health Holdings Inc (NYSE:IMS) shareholders have witnessed a slight decrease in hedge fund interest recently. The company was included in the equity portfolios of 19 funds tracked by Insider Monkey at the end of September, compared to 21 funds three months earlier. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Atmos Energy Corporation (NYSE:ATO), IDEXX Laboratories, Inc. (NASDAQ:IDXX), and The Cooper Companies, Inc. (NYSE:COO) to gather more data points.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Now, we’re going to review the fresh action regarding IMS Health Holdings Inc (NYSE:IMS).
How are hedge funds trading IMS Health Holdings Inc (NYSE:IMS)?
During the third quarter, the number of investors tracked by Insider Monkey long IMS Health Holdings declined by 10% to 19. By comparison, 28 hedge funds held shares or bullish call options in IMS heading into 2016. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Peter Adam Hochfelder’s Brahman Capital has the largest position in IMS Health Holdings Inc (NYSE:IMS), worth close to $238.1 million, corresponding to 8.4% of its total 13F portfolio. Coming in second is Glenview Capital, led by Larry Robbins, which holds a $232.8 million position; 1.7% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions comprise Farallon Capital, Robert Pitts’ Steadfast Capital Management and David Gallo’s Valinor Management LLC. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.