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 823 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 June 30th, when the S&P 500 Index was trading around the 3100 level. Stocks kept going up since then. 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) has experienced an increase in hedge fund sentiment recently. Agilent Technologies Inc. (NYSE:A) was in 38 hedge funds’ portfolios at the end of the second quarter of 2020. The all time high for this statistics is 52. There were 35 hedge funds in our database with A holdings at the end of March. Our calculations also showed that A isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost precious metals prices. So, we are checking out this junior gold mining stock. Legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s take a look at the latest hedge fund action encompassing Agilent Technologies Inc. (NYSE:A).
What have hedge funds been doing with Agilent Technologies Inc. (NYSE:A)?
At the end of the second quarter, a total of 38 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards A over the last 20 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Bill Ackman’s Pershing Square has the number one position in Agilent Technologies Inc. (NYSE:A), worth close to $1.1158 billion, accounting for 14.4% of its total 13F portfolio. Coming in second is William von Mueffling of Cantillon Capital Management, with a $367.4 million position; 3.2% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors with similar optimism comprise D. E. Shaw’s D E Shaw, Ian Simm’s Impax Asset Management and Tim Hurd and Ed Magnus’s BlueSpruce Investments. In terms of the portfolio weights assigned to each position Pershing Square allocated the biggest weight to Agilent Technologies Inc. (NYSE:A), around 14.39% of its 13F portfolio. BlueSpruce Investments is also relatively very bullish on the stock, designating 5.44 percent of its 13F equity portfolio to A.
As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Point72 Asset Management, managed by Steve Cohen, assembled the most valuable position in Agilent Technologies Inc. (NYSE:A). Point72 Asset Management had $29.8 million invested in the company at the end of the quarter. Thyra Zerhusen’s Fairpointe Capital also made a $21.2 million investment in the stock during the quarter. The other funds with brand new A positions are Donald Sussman’s Paloma Partners, David Costen Haley’s HBK Investments, and Greg Eisner’s Engineers Gate Manager.
Let’s go over hedge fund activity in other stocks similar to Agilent Technologies Inc. (NYSE:A). These stocks are Paychex, Inc. (NASDAQ:PAYX), IQVIA Holdings, Inc. (NYSE:IQV), The Hershey Company (NYSE:HSY), CRH PLC (NYSE:CRH), ING Groep N.V. (NYSE:ING), TE Connectivity Ltd. (NYSE:TEL), and American International Group Inc (NYSE:AIG). All of these stocks’ market caps are similar to A’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 34.3 hedge funds with bullish positions and the average amount invested in these stocks was $1346 million. That figure was $2815 million in A’s case. IQVIA Holdings, Inc. (NYSE:IQV) is the most popular stock in this table. On the other hand CRH PLC (NYSE:CRH) is the least popular one with only 7 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 56.2. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 33% in 2020 through the end of August and still beat the market by 23.2 percentage points. Hedge funds were also right about betting on A, though not to the same extent, as the stock returned 13.6% since the end of June and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.