Is Edwards Lifesciences Corporation (EW) A Good Stock To Buy?

In this article we will take a look at whether hedge funds think Edwards Lifesciences Corporation (NYSE:EW) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Is EW a good stock to buy? Edwards Lifesciences Corporation (NYSE:EW) has experienced a decrease in enthusiasm from smart money of late. Edwards Lifesciences Corporation (NYSE:EW) was in 43 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 49. Our calculations also showed that EW isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

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 take a look at the fresh hedge fund action surrounding Edwards Lifesciences Corporation (NYSE:EW).

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

At Q3’s end, a total of 43 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from one quarter earlier. By comparison, 46 hedge funds held shares or bullish call options in EW a year ago. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Fisher Asset Management, managed by Ken Fisher, holds the number one position in Edwards Lifesciences Corporation (NYSE:EW). Fisher Asset Management has a $727.3 million position in the stock, comprising 0.5% of its 13F portfolio. Coming in second is Peter Rathjens, Bruce Clarke and John Campbell of Arrowstreet Capital, with a $288.9 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other peers that hold long positions comprise John Overdeck and David Siegel’s Two Sigma Advisors, Noam Gottesman’s GLG Partners and OrbiMed Advisors. In terms of the portfolio weights assigned to each position Tri Locum Partners allocated the biggest weight to Edwards Lifesciences Corporation (NYSE:EW), around 5.53% of its 13F portfolio. Giverny Capital is also relatively very bullish on the stock, earmarking 2.71 percent of its 13F equity portfolio to EW.

Since Edwards Lifesciences Corporation (NYSE:EW) has witnessed a decline in interest from the smart money, it’s easy to see that there exists a select few funds that slashed their full holdings heading into Q4. Interestingly, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the biggest position of the 750 funds watched by Insider Monkey, totaling close to $66.8 million in stock, and Michael Rockefeller and KarláKroeker’s Woodline Partners was right behind this move, as the fund dropped about $31.8 million worth. These transactions are intriguing to say the least, as total hedge fund interest fell by 4 funds heading into Q4.

Let’s check out hedge fund activity in other stocks similar to Edwards Lifesciences Corporation (NYSE:EW). These stocks are Vale SA (NYSE:VALE), DoorDash, Inc. (NYSE:DASH), CME Group Inc (NASDAQ:CME), Cigna Corporation (NYSE:CI), Westpac Banking Corporation (NYSE:WBK), Petroleo Brasileiro S.A. – Petrobras (NYSE:PBR), and CSX Corporation (NYSE:CSX). This group of stocks’ market values match EW’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 39.4 hedge funds with bullish positions and the average amount invested in these stocks was $3326 million. That figure was $2169 million in EW’s case. CME Group Inc (NASDAQ:CME) is the most popular stock in this table. On the other hand Westpac Banking Corporation (NYSE:WBK) is the least popular one with only 6 bullish hedge fund positions. Edwards Lifesciences Corporation (NYSE:EW) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EW is 59.2. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately EW wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on EW were disappointed as the stock returned -5.2% since the end of September (through 11/30) 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 many of these stocks already outperformed the market since 2019.

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

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