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Is ICON Public Limited Company (ICLR) A Good Stock To Buy?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4 years and analyze what the smart money thinks of ICON Public Limited Company (NASDAQ:ICLR) based on that data.

ICON Public Limited Company (NASDAQ:ICLR) was in 20 hedge funds’ portfolios at the end of the third quarter of 2019. ICLR investors should be aware of an increase in support from the world’s most elite money managers of late. There were 19 hedge funds in our database with ICLR holdings at the end of the previous quarter. Our calculations also showed that ICLR isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

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 flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 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.

David E. Shaw of D.E. Shaw

David E. Shaw of D.E. Shaw

Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s take a gander at the recent hedge fund action surrounding ICON Public Limited Company (NASDAQ:ICLR).

Hedge fund activity in ICON Public Limited Company (NASDAQ:ICLR)

At Q3’s end, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from the second quarter of 2019. On the other hand, there were a total of 22 hedge funds with a bullish position in ICLR a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

More specifically, Renaissance Technologies was the largest shareholder of ICON Public Limited Company (NASDAQ:ICLR), with a stake worth $340.5 million reported as of the end of September. Trailing Renaissance Technologies was D E Shaw, which amassed a stake valued at $51.2 million. Polar Capital, Arrowstreet Capital, and Partner Fund 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 McKinley Capital Management allocated the biggest weight to ICON Public Limited Company (NASDAQ:ICLR), around 1.08% of its 13F portfolio. Partner Fund Management is also relatively very bullish on the stock, earmarking 1.03 percent of its 13F equity portfolio to ICLR.

As one would reasonably expect, specific money managers have jumped into ICON Public Limited Company (NASDAQ:ICLR) headfirst. Weld Capital Management, managed by Minhua Zhang, initiated the most valuable position in ICON Public Limited Company (NASDAQ:ICLR). Weld Capital Management had $0.4 million invested in the company at the end of the quarter. Matthew Tewksbury’s Stevens Capital Management also initiated a $0.3 million position during the quarter.

Let’s now review hedge fund activity in other stocks similar to ICON Public Limited Company (NASDAQ:ICLR). These stocks are Euronet Worldwide, Inc. (NASDAQ:EEFT), Invesco Ltd. (NYSE:IVZ), Canopy Growth Corporation (NYSE:CGC), and Ares Capital Corporation (NASDAQ:ARCC). This group of stocks’ market values are similar to ICLR’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
EEFT 35 322755 2
IVZ 24 198236 4
CGC 8 23222 4
ARCC 21 225163 -2
Average 22 192344 2

View table here if you experience formatting issues.

As you can see these stocks had an average of 22 hedge funds with bullish positions and the average amount invested in these stocks was $192 million. That figure was $613 million in ICLR’s case. Euronet Worldwide, Inc. (NASDAQ:EEFT) is the most popular stock in this table. On the other hand Canopy Growth Corporation (NYSE:CGC) is the least popular one with only 8 bullish hedge fund positions. ICON Public Limited Company (NASDAQ:ICLR) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on ICLR as the stock returned 10.7% during the first two months of Q4 and outperformed the market by an even larger margin.

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

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