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 third 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 6 years and analyze what the smart money thinks of Medtronic plc (NYSE:MDT) based on that data and determine whether they were really smart about the stock.
Medtronic plc (NYSE:MDT) was in 62 hedge funds’ portfolios at the end of September. The all time high for this statistic is 68. MDT has seen a decrease in hedge fund interest lately. There were 68 hedge funds in our database with MDT positions at the end of the second quarter. Our calculations also showed that MDT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Phillip Gross of Adage Capital
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. Keeping this in mind let’s view the new hedge fund action regarding Medtronic plc (NYSE:MDT).
Do Hedge Funds Think MDT Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 62 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from the second quarter of 2021. On the other hand, there were a total of 62 hedge funds with a bullish position in MDT a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Medtronic plc (NYSE:MDT) was held by Two Sigma Advisors, which reported holding $373.5 million worth of stock at the end of September. It was followed by Fisher Asset Management with a $304.7 million position. Other investors bullish on the company included AQR Capital Management, Adage Capital Management, and D E Shaw. In terms of the portfolio weights assigned to each position Tamarack Capital Management allocated the biggest weight to Medtronic plc (NYSE:MDT), around 7.92% of its 13F portfolio. Tri Locum Partners is also relatively very bullish on the stock, setting aside 5.18 percent of its 13F equity portfolio to MDT.
Because Medtronic plc (NYSE:MDT) has witnessed falling interest from the entirety of the hedge funds we track, it’s safe to say that there were a few hedge funds that slashed their entire stakes heading into Q4. Interestingly, Matthew Stadelman’s Diamond Hill Capital cut the largest position of the 750 funds monitored by Insider Monkey, valued at about $571.1 million in stock. Joseph Edelman’s fund, Perceptive Advisors, also cut its stock, about $55.9 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest was cut by 6 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Medtronic plc (NYSE:MDT) but similarly valued. We will take a look at T-Mobile US, Inc. (NYSE:TMUS), SAP SE (NYSE:SAP), United Parcel Service, Inc. (NYSE:UPS), Moderna, Inc. (NASDAQ:MRNA), NextEra Energy, Inc. (NYSE:NEE), Linde plc (NYSE:LIN), and Charter Communications, Inc. (NASDAQ:CHTR). This group of stocks’ market caps are closest to MDT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TMUS | 89 | 6928776 | -11 |
| SAP | 15 | 1529829 | -2 |
| UPS | 42 | 1266269 | -10 |
| MRNA | 49 | 7315014 | 12 |
| NEE | 53 | 2374429 | -6 |
| LIN | 46 | 4769164 | -9 |
| CHTR | 74 | 18794064 | -1 |
| Average | 52.6 | 6139649 | -3.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 52.6 hedge funds with bullish positions and the average amount invested in these stocks was $6140 million. That figure was $2279 million in MDT’s case. T-Mobile US, Inc. (NYSE:TMUS) is the most popular stock in this table. On the other hand SAP SE (NYSE:SAP) is the least popular one with only 15 bullish hedge fund positions. Medtronic plc (NYSE:MDT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MDT is 58.1. 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, MDT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MDT were disappointed as the stock returned -16.9% 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.
Follow Medtronic Inc (Old Filings) (NYSE:MDT)
Follow Medtronic Inc (Old Filings) (NYSE:MDT)
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Disclosure: None. This article was originally published at Insider Monkey.
