Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 5 years and analyze what the smart money thinks of Anthem Inc (NYSE:ANTM) based on that data and determine whether they were really smart about the stock.
Anthem Inc (NYSE:ANTM) was in 69 hedge funds’ portfolios at the end of June. The all time high for this statistics is 73. ANTM investors should pay attention to a decrease in hedge fund sentiment of late. There were 70 hedge funds in our database with ANTM holdings at the end of March. Our calculations also showed that ANTM 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.
At the moment there are dozens of formulas stock traders employ to assess their holdings. Two of the best formulas are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the top fund managers can outpace the broader indices by a superb margin (see the details here).
At Insider Monkey we scour multiple sources to uncover the next great investment idea. 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.. We go through lists like the 10 most profitable companies in America 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. Keeping this in mind we’re going to take a look at the latest hedge fund action surrounding Anthem Inc (NYSE:ANTM).
What does smart money think about Anthem Inc (NYSE:ANTM)?
At Q2’s end, a total of 69 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -1% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in ANTM over the last 20 quarters. With hedgies’ sentiment swirling, there exists a select group of key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
The largest stake in Anthem Inc (NYSE:ANTM) was held by Orbis Investment Management, which reported holding $885.3 million worth of stock at the end of September. It was followed by Eagle Capital Management with a $567.7 million position. Other investors bullish on the company included Farallon Capital, AQR Capital Management, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Brave Warrior Capital allocated the biggest weight to Anthem Inc (NYSE:ANTM), around 10.09% of its 13F portfolio. Orbis Investment Management is also relatively very bullish on the stock, designating 6.66 percent of its 13F equity portfolio to ANTM.
Judging by the fact that Anthem Inc (NYSE:ANTM) has witnessed declining sentiment from the smart money, logic holds that there is a sect of money managers that elected to cut their entire stakes heading into Q3. It’s worth mentioning that Andreas Halvorsen’s Viking Global dropped the biggest stake of all the hedgies watched by Insider Monkey, totaling an estimated $411.1 million in stock. David Fear’s fund, Thunderbird Partners, also said goodbye to its stock, about $61.3 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds heading into Q3.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Anthem Inc (NYSE:ANTM) but similarly valued. These stocks are Fiserv, Inc. (NASDAQ:FISV), Booking Holdings Inc. (NASDAQ:BKNG), Zoetis Inc (NYSE:ZTS), VMware, Inc. (NYSE:VMW), Automatic Data Processing, Inc. (NASDAQ:ADP), Regeneron Pharmaceuticals Inc (NASDAQ:REGN), and Canadian National Railway Company (NYSE:CNI). All of these stocks’ market caps are similar to ANTM’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 58.1 hedge funds with bullish positions and the average amount invested in these stocks was $2697 million. That figure was $4103 million in ANTM’s case. Booking Holdings Inc. (NASDAQ:BKNG) is the most popular stock in this table. On the other hand Canadian National Railway Company (NYSE:CNI) is the least popular one with only 28 bullish hedge fund positions. Anthem Inc (NYSE:ANTM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ANTM is 62.5. 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 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 28.2% in 2020 through August 24th but beat the market by 20.6 percentage points. Unfortunately ANTM wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on ANTM were disappointed as the stock returned 6.2% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 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.