We are still in an overall bull market and many stocks that smart money investors were piling into surged through the end of November. Among them, Facebook and Microsoft ranked among the top 3 picks and these stocks gained 54% and 51% respectively. Hedge funds’ top 3 stock picks returned 41.7% this year and beat the S&P 500 ETFs by 14 percentage points. Investing in index funds guarantees you average returns, not superior returns. We are looking to generate superior returns for our readers. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Integra Lifesciences Holdings Corp (NASDAQ:IART).
Integra Lifesciences Holdings Corp (NASDAQ:IART) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 21 hedge funds’ portfolios at the end of September. 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 GrubHub Inc (NYSE:GRUB), Eaton Vance Corp (NYSE:EV), and Seaboard Corporation (NYSE:SEB) to gather more data points. Our calculations also showed that IART isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are a large number of tools stock market investors use to value stocks. Some of the less utilized tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the elite money managers can outperform the market by a very impressive amount (see the details here).
Paul Marshall of Marshall Wace
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s take a gander at the fresh hedge fund action surrounding Integra Lifesciences Holdings Corp (NASDAQ:IART).
Hedge fund activity in Integra Lifesciences Holdings Corp (NASDAQ:IART)
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. By comparison, 14 hedge funds held shares or bullish call options in IART a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Point72 Asset Management held the most valuable stake in Integra Lifesciences Holdings Corp (NASDAQ:IART), which was worth $47.7 million at the end of the third quarter. On the second spot was Fisher Asset Management which amassed $43.7 million worth of shares. D E Shaw, Marshall Wace, and Renaissance Technologies 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 Endurant Capital Management allocated the biggest weight to Integra Lifesciences Holdings Corp (NASDAQ:IART), around 1.51% of its 13F portfolio. Point72 Asset Management is also relatively very bullish on the stock, setting aside 0.29 percent of its 13F equity portfolio to IART.
Because Integra Lifesciences Holdings Corp (NASDAQ:IART) has experienced declining sentiment from hedge fund managers, logic holds that there was a specific group of fund managers who sold off their entire stakes heading into Q4. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management said goodbye to the biggest position of the 750 funds tracked by Insider Monkey, valued at an estimated $1.8 million in stock. Efrem Kamen’s fund, Pura Vida Investments, also dumped its stock, about $1.4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks similar to Integra Lifesciences Holdings Corp (NASDAQ:IART). These stocks are GrubHub Inc (NYSE:GRUB), Eaton Vance Corp (NYSE:EV), Seaboard Corporation (NYSE:SEB), and Floor & Decor Holdings, Inc. (NYSE:FND). This group of stocks’ market valuations are closest to IART’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GRUB | 23 | 595061 | -9 |
| EV | 15 | 101488 | 0 |
| SEB | 16 | 147649 | 0 |
| FND | 23 | 471890 | 2 |
| Average | 19.25 | 329022 | -1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.25 hedge funds with bullish positions and the average amount invested in these stocks was $329 million. That figure was $216 million in IART’s case. GrubHub Inc (NYSE:GRUB) is the most popular stock in this table. On the other hand Eaton Vance Corp (NYSE:EV) is the least popular one with only 15 bullish hedge fund positions. Integra Lifesciences Holdings Corp (NASDAQ:IART) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately IART wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on IART were disappointed as the stock returned 1.5% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
