Did The Smart Money Get Agilent Technologies Inc. (A) Right?

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 867 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 September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Agilent Technologies Inc. (NYSE:A) and determine whether the smart money was really smart about this stock.

Agilent Technologies Inc. (NYSE:A) investors should be aware of an increase in hedge fund sentiment of late. Agilent Technologies Inc. (NYSE:A) was in 46 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 52. Our calculations also showed that A isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind we’re going to take a glance at the recent hedge fund action encompassing Agilent Technologies Inc. (NYSE:A).

John Overdeck of Two Sigma

John Overdeck of Two Sigma Advisors

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

At third quarter’s end, a total of 46 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 18% from one quarter earlier. By comparison, 39 hedge funds held shares or bullish call options in A a year ago. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Ian Simm’s Impax Asset Management has the biggest position in Agilent Technologies Inc. (NYSE:A), worth close to $629.5 million, amounting to 2.6% of its total 13F portfolio. On Impax Asset Management’s heels is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $626.7 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Other professional money managers that are bullish include William von Mueffling’s Cantillon Capital Management, D. E. Shaw’s D E Shaw and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Claar Advisors allocated the biggest weight to Agilent Technologies Inc. (NYSE:A), around 4.73% of its 13F portfolio. Cantillon Capital Management is also relatively very bullish on the stock, earmarking 3.9 percent of its 13F equity portfolio to A.

Consequently, key hedge funds were leading the bulls’ herd. Two Sigma Advisors, managed by John Overdeck and David Siegel, assembled the largest position in Agilent Technologies Inc. (NYSE:A). Two Sigma Advisors had $228.5 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $29.1 million position during the quarter. The other funds with brand new A positions are Ryan Caldwell’s Chiron Investment Management, Jinghua Yan’s TwinBeech Capital, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.

Let’s now take a look at hedge fund activity in other stocks similar to Agilent Technologies Inc. (NYSE:A). We will take a look at Enterprise Products Partners L.P. (NYSE:EPD), American International Group Inc (NYSE:AIG), Exelon Corporation (NASDAQ:EXC), TC Energy Corporation (NYSE:TRP), Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX), Roper Technologies Inc. (NYSE:ROP), and Monster Beverage Corp (NASDAQ:MNST). This group of stocks’ market values are closest to A’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EPD 25 233255 -3
AIG 30 1904264 -9
EXC 36 1108781 1
TRP 15 84084 -7
VRTX 55 2713283 -5
ROP 45 1667275 4
MNST 42 2134498 -4
Average 35.4 1406491 -3.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 35.4 hedge funds with bullish positions and the average amount invested in these stocks was $1406 million. That figure was $3136 million in A’s case. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) is the most popular stock in this table. On the other hand TC Energy Corporation (NYSE:TRP) is the least popular one with only 15 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 overall hedge fund sentiment score for A is 75.3. 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, A wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on A were disappointed as the stock returned -11.3% since the end of September (through 1/31) 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 all of these stocks already outperformed the market since 2019.

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