Many prominent investors, including Warren Buffett, David Tepper and Stan Druckenmiller, have been cautious regarding the current bull market and missed out as the stock market reached another high in recent weeks. On the other hand, technology hedge funds weren’t timid and registered double digit market beating gains. Financials, energy and industrial stocks initially suffered the most but many of these stocks delivered strong returns since November and hedge funds actually increased their positions in these stocks. In this article we will find out how hedge fund sentiment towards Perrigo Co Plc (NYSE:PRGO) changed recently.
Is PRGO a good stock to buy? Perrigo Co Plc (NYSE:PRGO) investors should be aware of an increase in hedge fund sentiment recently. Perrigo Co Plc (NYSE:PRGO) was in 33 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 63. There were 31 hedge funds in our database with PRGO holdings at the end of December. Our calculations also showed that PRGO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 homepage. Now we’re going to view the fresh hedge fund action encompassing Perrigo Co Plc (NYSE:PRGO).
Do Hedge Funds Think PRGO Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from the previous quarter. On the other hand, there were a total of 28 hedge funds with a bullish position in PRGO a year ago. With the smart money’s capital changing hands, there exists an “upper tier” of key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
More specifically, Camber Capital Management was the largest shareholder of Perrigo Co Plc (NYSE:PRGO), with a stake worth $113.3 million reported as of the end of March. Trailing Camber Capital Management was Arrowstreet Capital, which amassed a stake valued at $54 million. Point72 Asset Management, D E Shaw, and Millennium 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 Camber Capital Management allocated the biggest weight to Perrigo Co Plc (NYSE:PRGO), around 3.89% of its 13F portfolio. Factorial Partners is also relatively very bullish on the stock, dishing out 1.24 percent of its 13F equity portfolio to PRGO.
Now, specific money managers have jumped into Perrigo Co Plc (NYSE:PRGO) headfirst. Point72 Asset Management, managed by Steve Cohen, initiated the largest position in Perrigo Co Plc (NYSE:PRGO). Point72 Asset Management had $48.5 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also made a $19.9 million investment in the stock during the quarter. The following funds were also among the new PRGO investors: Doron Breen and Mori Arkin’s Sphera Global Healthcare Fund, Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management, and Karim Abbadi and Edward McBride’s Centiva Capital.
Let’s now review hedge fund activity in other stocks similar to Perrigo Co Plc (NYSE:PRGO). These stocks are Ashland Global Holdings Inc.. (NYSE:ASH), Owl Rock Capital Corporation (NYSE:ORCC), Janus Henderson Group plc (NYSE:JHG), Essent Group Ltd (NYSE:ESNT), 1Life Healthcare, Inc. (NASDAQ:ONEM), Stag Industrial Inc (NYSE:STAG), and Cousins Properties Incorporated (NYSE:CUZ). This group of stocks’ market values resemble PRGO’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 24.4 hedge funds with bullish positions and the average amount invested in these stocks was $537 million. That figure was $398 million in PRGO’s case. Ashland Global Holdings Inc.. (NYSE:ASH) is the most popular stock in this table. On the other hand Cousins Properties Incorporated (NYSE:CUZ) is the least popular one with only 16 bullish hedge fund positions. Perrigo Co Plc (NYSE:PRGO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PRGO is 65.2. 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. 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 22.8% in 2021 through July 2nd and still beat the market by 6 percentage points. Hedge funds were also right about betting on PRGO, though not to the same extent, as the stock returned 16.5% since Q1 (through July 2nd) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.