IDEX Corporation (IEX): Hedge Funds Are Snapping Up

The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards IDEX Corporation (NYSE:IEX).

IDEX Corporation (NYSE:IEX) investors should be aware of an increase in support from the world’s most elite money managers lately. IDEX Corporation (NYSE:IEX) was in 22 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 33. Our calculations also showed that IEX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.


Cliff Asness of AQR Capital Management

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 let’s take a gander at the recent hedge fund action encompassing IDEX Corporation (NYSE:IEX).

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

At Q2’s end, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards IEX over the last 24 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Impax Asset Management held the most valuable stake in IDEX Corporation (NYSE:IEX), which was worth $653.3 million at the end of the second quarter. On the second spot was Echo Street Capital Management which amassed $110.4 million worth of shares. GAMCO Investors, AQR Capital Management, and Montanaro Asset Management 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 Montanaro Asset Management allocated the biggest weight to IDEX Corporation (NYSE:IEX), around 3.41% of its 13F portfolio. Impax Asset Management is also relatively very bullish on the stock, earmarking 2.88 percent of its 13F equity portfolio to IEX.

Consequently, specific money managers have been driving this bullishness. Renaissance Technologies, created the biggest position in IDEX Corporation (NYSE:IEX). Renaissance Technologies had $19.6 million invested in the company at the end of the quarter. Ray Dalio’s Bridgewater Associates also made a $4.6 million investment in the stock during the quarter. The other funds with brand new IEX positions are D. E. Shaw’s D E Shaw, Donald Sussman’s Paloma Partners, and Lee Ainslie’s Maverick Capital.

Let’s also examine hedge fund activity in other stocks similar to IDEX Corporation (NYSE:IEX). These stocks are Entegris Inc (NASDAQ:ENTG), VICI Properties Inc. (NYSE:VICI), Dynatrace, Inc. (NYSE:DT), Cardinal Health, Inc. (NYSE:CAH), PTC Inc (NASDAQ:PTC), The Carlyle Group Inc (NASDAQ:CG), and Brookfield Infrastructure Partners L.P. (NYSE:BIP). This group of stocks’ market valuations resemble IEX’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ENTG 25 1389606 2
VICI 37 664684 -4
DT 50 1949953 -2
CAH 40 897223 1
PTC 31 1958876 -2
CG 21 601725 -5
BIP 16 71356 4
Average 31.4 1076203 -0.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 31.4 hedge funds with bullish positions and the average amount invested in these stocks was $1076 million. That figure was $945 million in IEX’s case. Dynatrace, Inc. (NYSE:DT) is the most popular stock in this table. On the other hand Brookfield Infrastructure Partners L.P. (NYSE:BIP) is the least popular one with only 16 bullish hedge fund positions. IDEX Corporation (NYSE:IEX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IEX 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. This is a slightly negative signal and 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 24% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately IEX wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); IEX investors were disappointed as the stock returned 1% since the end of June (through 10/22) 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 most of these stocks already outperformed the market in 2021.

Follow Idex Corp (NYSE:IEX)

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