In this article we will check out the progression of hedge fund sentiment towards Agilent Technologies Inc. (NYSE:A) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is Agilent stock a buy? Agilent Technologies Inc. (NYSE:A) has experienced an increase in support from the world’s most elite money managers lately. Agilent Technologies Inc. (NYSE:A) was in 45 hedge funds’ portfolios at the end of December. The all time high for this statistic is 52. Our calculations also showed that A isn’t among the 30 most popular stocks among hedge funds (click for Q4 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 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock 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 (or at the end of this article). With all of this in mind let’s check out the fresh hedge fund action regarding Agilent Technologies Inc. (NYSE:A).
Do Hedge Funds Think A Is A Good Stock To Buy Now?
At the end of December, a total of 45 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from the third quarter of 2020. By comparison, 46 hedge funds held shares or bullish call options in A a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Pershing Square, managed by Bill Ackman, holds the number one position in Agilent Technologies Inc. (NYSE:A). Pershing Square has a $1.4499 billion position in the stock, comprising 14.5% of its 13F portfolio. The second largest stake is held by William von Mueffling of Cantillon Capital Management, with a $485 million position; the fund has 3.6% of its 13F portfolio invested in the stock. Some other professional money managers with similar optimism encompass Ian Simm’s Impax Asset Management, Tim Hurd and Ed Magnus’s BlueSpruce Investments and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Pershing Square allocated the biggest weight to Agilent Technologies Inc. (NYSE:A), around 14.49% of its 13F portfolio. BlueSpruce Investments is also relatively very bullish on the stock, setting aside 5.57 percent of its 13F equity portfolio to A.
Consequently, specific money managers have jumped into Agilent Technologies Inc. (NYSE:A) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, assembled the most outsized position in Agilent Technologies Inc. (NYSE:A). Arrowstreet Capital had $27.9 million invested in the company at the end of the quarter. Terry Smith’s Fundsmith Long/Short Fund also made a $4 million investment in the stock during the quarter. The other funds with new positions in the stock are Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners, and Qing Li’s Sciencast Management.
Let’s now review hedge fund activity in other stocks similar to Agilent Technologies Inc. (NYSE:A). These stocks are General Mills, Inc. (NYSE:GIS), Xcel Energy Inc (NASDAQ:XEL), The Travelers Companies Inc (NYSE:TRV), DexCom, Inc. (NASDAQ:DXCM), Aptiv PLC (NYSE:APTV), Parker-Hannifin Corporation (NYSE:PH), and Ford Motor Company (NYSE:F). This group of stocks’ market caps resemble A’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 42 hedge funds with bullish positions and the average amount invested in these stocks was $1132 million. That figure was $3508 million in A’s case. Parker-Hannifin Corporation (NYSE:PH) is the most popular stock in this table. On the other hand Xcel Energy Inc (NASDAQ:XEL) is the least popular one with only 28 bullish hedge fund positions. Agilent Technologies Inc. (NYSE:A) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for A is 66.3. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately A wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on A were disappointed as the stock returned 3.7% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Agilent Technologies Inc. (NYSE:A)
Follow Agilent Technologies Inc. (NYSE:A)
Disclosure: None. This article was originally published at Insider Monkey.