Hedge Funds Are Dumping Hill-Rom Holdings, Inc. (HRC)

In this article we will take a look at whether hedge funds think Hill-Rom Holdings, Inc. (NYSE:HRC) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Hill-Rom Holdings, Inc. (NYSE:HRC) investors should pay attention to a decrease in enthusiasm from smart money in recent months. Hill-Rom Holdings, Inc. (NYSE:HRC) was in 22 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 34. There were 30 hedge funds in our database with HRC holdings at the end of March. Our calculations also showed that HRC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). 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, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we’re going to take a glance at the latest hedge fund action surrounding Hill-Rom Holdings, Inc. (NYSE:HRC).

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

Heading into the third quarter of 2021, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -27% from one quarter earlier. On the other hand, there were a total of 30 hedge funds with a bullish position in HRC a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Among these funds, Fisher Asset Management held the most valuable stake in Hill-Rom Holdings, Inc. (NYSE:HRC), which was worth $74.2 million at the end of the second quarter. On the second spot was Arrowstreet Capital which amassed $66.8 million worth of shares. Point72 Asset Management, Balyasny Asset Management, and Citadel Investment Group 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 Sio Capital allocated the biggest weight to Hill-Rom Holdings, Inc. (NYSE:HRC), around 2.16% of its 13F portfolio. Sivik Global Healthcare is also relatively very bullish on the stock, dishing out 0.78 percent of its 13F equity portfolio to HRC.

Judging by the fact that Hill-Rom Holdings, Inc. (NYSE:HRC) has experienced declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of funds that slashed their full holdings by the end of the second quarter. Intriguingly, James E. Flynn’s Deerfield Management dropped the largest position of the 750 funds followed by Insider Monkey, valued at an estimated $30.9 million in stock. John Overdeck and David Siegel’s fund, Two Sigma Advisors, also said goodbye to its stock, about $15.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 8 funds by the end of the second quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Hill-Rom Holdings, Inc. (NYSE:HRC). We will take a look at Knight-Swift Transportation Holdings Inc. (NYSE:KNX), SiteOne Landscape Supply, Inc. (NYSE:SITE), Starwood Property Trust, Inc. (NYSE:STWD), Alaska Air Group, Inc. (NYSE:ALK), FirstService Corporation (NASDAQ:FSV), Royal Gold, Inc (NASDAQ:RGLD), and Luminar Technologies, Inc. (NASDAQ:LAZR). This group of stocks’ market valuations match HRC’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $266 million. That figure was $387 million in HRC’s case. Alaska Air Group, Inc. (NYSE:ALK) is the most popular stock in this table. On the other hand Starwood Property Trust, Inc. (NYSE:STWD) is the least popular one with only 11 bullish hedge fund positions. Hill-Rom Holdings, Inc. (NYSE:HRC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HRC is 36.8. 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 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on HRC as the stock returned 36.4% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.

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