Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Hologic, Inc. (NASDAQ:HOLX).
Is HOLX a good stock to buy now? Hedge funds were getting more optimistic. The number of long hedge fund positions rose by 4 lately. Hologic, Inc. (NASDAQ:HOLX) was in 50 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 46. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that HOLX 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are plenty of indicators investors use to evaluate their holdings. A couple of the most innovative indicators are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the top picks of the best fund managers can outclass the market by a superb margin (see the details here).
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 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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. With all of this in mind let’s take a gander at the recent hedge fund action encompassing Hologic, Inc. (NASDAQ:HOLX).
What does smart money think about Hologic, Inc. (NASDAQ:HOLX)?
At the end of the third quarter, a total of 50 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 9% from the previous quarter. By comparison, 36 hedge funds held shares or bullish call options in HOLX a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, D E Shaw, managed by D. E. Shaw, holds the biggest position in Hologic, Inc. (NASDAQ:HOLX). D E Shaw has a $181.7 million position in the stock, comprising 0.2% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, led by Israel Englander, holding a $129.6 million position; 0.2% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Brandon Haley’s Holocene Advisors, Larry Robbins’s Glenview Capital and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Tamarack Capital Management allocated the biggest weight to Hologic, Inc. (NASDAQ:HOLX), around 6.15% of its 13F portfolio. Iron Triangle Partners is also relatively very bullish on the stock, earmarking 5.32 percent of its 13F equity portfolio to HOLX.
As aggregate interest increased, key money managers have jumped into Hologic, Inc. (NASDAQ:HOLX) headfirst. Renaissance Technologies, assembled the most valuable position in Hologic, Inc. (NASDAQ:HOLX). Renaissance Technologies had $25.7 million invested in the company at the end of the quarter. Louis Bacon’s Moore Global Investments also made a $13.7 million investment in the stock during the quarter. The following funds were also among the new HOLX investors: Brad Farber’s Atika Capital, Alexander West’s Blue Pool Capital, and Ray Dalio’s Bridgewater Associates.
Let’s check out hedge fund activity in other stocks similar to Hologic, Inc. (NASDAQ:HOLX). These stocks are PT Telekomunikasi Indonesia (NYSE:TLK), Smith & Nephew plc (NYSE:SNN), Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), Kansas City Southern (NYSE:KSU), CDW Corporation (NASDAQ:CDW), Citrix Systems, Inc. (NASDAQ:CTXS), and Fox Corporation (NASDAQ:FOX). This group of stocks’ market valuations are closest to HOLX’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 29.7 hedge funds with bullish positions and the average amount invested in these stocks was $1123 million. That figure was $1146 million in HOLX’s case. Horizon Therapeutics Public Limited Company (NASDAQ:HZNP) is the most popular stock in this table. On the other hand PT Telekomunikasi Indonesia (NYSE:TLK) is the least popular one with only 8 bullish hedge fund positions. Hologic, Inc. (NASDAQ:HOLX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HOLX is 78.6. 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 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 31.6% in 2020 through December 2nd and beat the market again by 16 percentage points. Unfortunately HOLX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on HOLX were disappointed as the stock returned 6.6% since the end of September (through 12/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.