Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in Q4 due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average over the long-term. The top 15 S&P 500 stocks among hedge funds at the end of September 2018 returned an average of 1% through March 15th whereas the S&P 500 Index ETF lost 2.2% during the same period. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Integra Lifesciences Holdings Corp (NASDAQ:IART) from the perspective of those elite funds.
Integra Lifesciences Holdings Corp (NASDAQ:IART) has seen an increase in enthusiasm from smart money in recent months. IART was in 18 hedge funds’ portfolios at the end of December. There were 14 hedge funds in our database with IART holdings at the end of the previous quarter. Our calculations also showed that IART isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a peek at the recent hedge fund action regarding Integra Lifesciences Holdings Corp (NASDAQ:IART).
How have hedgies been trading Integra Lifesciences Holdings Corp (NASDAQ:IART)?
Heading into the first quarter of 2019, a total of 18 of the hedge funds tracked by Insider Monkey were long this stock, a change of 29% from the previous quarter. On the other hand, there were a total of 9 hedge funds with a bullish position in IART a year ago. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
Among these funds, Fisher Asset Management held the most valuable stake in Integra Lifesciences Holdings Corp (NASDAQ:IART), which was worth $42.6 million at the end of the third quarter. On the second spot was D E Shaw which amassed $19.7 million worth of shares. Moreover, Citadel Investment Group, Millennium Management, and Broadfin Capital were also bullish on Integra Lifesciences Holdings Corp (NASDAQ:IART), allocating a large percentage of their portfolios to this stock.
Consequently, key hedge funds were breaking ground themselves. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the most outsized position in Integra Lifesciences Holdings Corp (NASDAQ:IART). Marshall Wace LLP had $6.5 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made a $4.9 million investment in the stock during the quarter. The other funds with brand new IART positions are Joel Greenblatt’s Gotham Asset Management, Benjamin A. Smith’s Laurion Capital Management, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Integra Lifesciences Holdings Corp (NASDAQ:IART) but similarly valued. We will take a look at Gates Industrial Corporation plc (NYSE:GTES), SINA Corp (NASDAQ:SINA), Nuance Communications Inc. (NASDAQ:NUAN), and YY Inc (NASDAQ:YY). This group of stocks’ market valuations are closest to IART’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GTES | 8 | 8961 | -1 |
| SINA | 21 | 439559 | -3 |
| NUAN | 35 | 290246 | 15 |
| YY | 24 | 149051 | -1 |
| Average | 22 | 221954 | 2.5 |
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 $222 million. That figure was $129 million in IART’s case. Nuance Communications Inc. (NASDAQ:NUAN) is the most popular stock in this table. On the other hand Gates Industrial Corporation plc (NYSE:GTES) is the least popular one with only 8 bullish hedge fund positions. Integra Lifesciences Holdings Corp (NASDAQ:IART) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately IART wasn’t nearly as popular as these 15 stock (hedge fund sentiment was quite bearish); IART investors were disappointed as the stock returned 14.8% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
