Agilent Technologies Inc. (A): Hedge Funds Still In Wait-and-See Mode

Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ complex research processes to determine the best stocks to invest in. A particularly interesting group of stocks that hedge funds like is the small-caps. The huge amount of capital does not allow hedge funds to invest a lot in small-caps, but our research showed that their most popular small-cap ideas are less efficiently priced and generate stronger returns than their large- and mega-cap picks and the broader market. That is why we pay special attention to the hedge fund activity in the small-cap space. Nevertheless, it is also possible to find underpriced large-cap stocks by following the hedge funds’ moves.

Is Agilent Technologies Inc. (NYSE:A) ready to rally soon? Hedge funds are getting less bullish. The number of long hedge fund bets dropped by 2 recently. Our calculations also showed that A isn’t among the 30 most popular stocks among hedge funds.

To the average investor there are many indicators investors put to use to analyze their stock investments. A pair of the most underrated indicators are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the best money managers can beat the S&P 500 by a very impressive amount (see the details here).

William Von Mueffling - Cantillon Capital Management

Unlike some fund managers who are betting on Dow reaching 40000 in a year, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to review the recent hedge fund action encompassing Agilent Technologies Inc. (NYSE:A).

Hedge fund activity in Agilent Technologies Inc. (NYSE:A)

At Q2’s end, a total of 39 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -5% from the previous quarter. By comparison, 45 hedge funds held shares or bullish call options in A a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with A Positions

The largest stake in Agilent Technologies Inc. (NYSE:A) was held by D E Shaw, which reported holding $366.7 million worth of stock at the end of March. It was followed by Cantillon Capital Management with a $294.6 million position. Other investors bullish on the company included Impax Asset Management, AQR Capital Management, and Renaissance Technologies.

Seeing as Agilent Technologies Inc. (NYSE:A) has experienced declining sentiment from the smart money, logic holds that there exists a select few money managers that decided to sell off their entire stakes by the end of the second quarter. At the top of the heap, Brian Ashford-Russell and Tim Woolley’s Polar Capital dropped the biggest investment of the “upper crust” of funds tracked by Insider Monkey, totaling about $50 million in stock. Stanley Druckenmiller’s fund, Duquesne Capital, also said goodbye to its stock, about $38.5 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 2 funds by the end of the second quarter.

Let’s now review hedge fund activity in other stocks similar to Agilent Technologies Inc. (NYSE:A). We will take a look at IDEXX Laboratories, Inc. (NASDAQ:IDXX), DTE Energy Company (NYSE:DTE), Lululemon Athletica inc. (NASDAQ:LULU), and Pinduoduo Inc. (NASDAQ:PDD). This group of stocks’ market caps match A’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
IDXX 37 711119 8
DTE 28 664329 3
LULU 49 1803118 7
PDD 29 459170 -3
Average 35.75 909434 3.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 35.75 hedge funds with bullish positions and the average amount invested in these stocks was $909 million. That figure was $1826 million in A’s case. Lululemon Athletica inc. (NASDAQ:LULU) is the most popular stock in this table. On the other hand DTE Energy Company (NYSE:DTE) is the least popular one with only 28 bullish hedge fund positions. Agilent Technologies Inc. (NYSE:A) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 20 most popular stocks (see the video below) among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on A, though not to the same extent, as the stock returned 3.1% during the third quarter and outperformed the market as well.
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

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