After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Grifols SA (NASDAQ:GRFS).
Is Grifols SA (NASDAQ:GRFS) a worthy stock to buy now? The smart money was getting less bullish. The number of bullish hedge fund bets shrunk by 3 in recent months. Grifols SA (NASDAQ:GRFS) was in 18 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 23. Our calculations also showed that GRFS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 21 hedge funds in our database with GRFS holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, 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 real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. You can subscribe to our free daily newsletter on our website. Now let’s review the latest hedge fund action surrounding Grifols SA (NASDAQ:GRFS).
Do Hedge Funds Think GRFS Is A Good Stock To Buy Now?
At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from the second quarter of 2020. On the other hand, there were a total of 22 hedge funds with a bullish position in GRFS a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Nitorum Capital was the largest shareholder of Grifols SA (NASDAQ:GRFS), with a stake worth $59.2 million reported as of the end of September. Trailing Nitorum Capital was Impax Asset Management, which amassed a stake valued at $57.7 million. Farallon Capital, Whitebox Advisors, and Hengistbury Investment Partners 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 Hengistbury Investment Partners allocated the biggest weight to Grifols SA (NASDAQ:GRFS), around 4.66% of its 13F portfolio. Nitorum Capital is also relatively very bullish on the stock, designating 2.62 percent of its 13F equity portfolio to GRFS.
Seeing as Grifols SA (NASDAQ:GRFS) has faced declining sentiment from hedge fund managers, we can see that there lies a certain “tier” of money managers that slashed their entire stakes heading into Q4. At the top of the heap, Nicolai Tangen’s Ako Capital dumped the largest investment of the “upper crust” of funds monitored by Insider Monkey, comprising about $223.9 million in stock. George Soros’s fund, Soros Fund Management, also dumped its stock, about $49.1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 3 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Grifols SA (NASDAQ:GRFS) but similarly valued. These stocks are ZoomInfo Technologies Inc. (NASDAQ:ZI), Domino’s Pizza, Inc. (NYSE:DPZ), Tractor Supply Company (NASDAQ:TSCO), Fox Corporation (NASDAQ:FOXA), iQIYI, Inc. (NASDAQ:IQ), BioNTech SE (NASDAQ:BNTX), and ORIX Corporation (NYSE:IX). This group of stocks’ market valuations are closest to GRFS’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ZI | 22 | 188106 | -2 |
| DPZ | 35 | 1759096 | -12 |
| TSCO | 48 | 1421203 | 10 |
| FOXA | 32 | 1505885 | -3 |
| IQ | 18 | 1132945 | 1 |
| BNTX | 17 | 218302 | 2 |
| IX | 4 | 4093 | 0 |
| Average | 25.1 | 889947 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.1 hedge funds with bullish positions and the average amount invested in these stocks was $890 million. That figure was $366 million in GRFS’s case. Tractor Supply Company (NASDAQ:TSCO) is the most popular stock in this table. On the other hand ORIX Corporation (NYSE:IX) is the least popular one with only 4 bullish hedge fund positions. Grifols SA (NASDAQ:GRFS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GRFS is 41.4. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on GRFS as the stock returned 9.9% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
