The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Quest Diagnostics Incorporated (NYSE:DGX).
Is DGX a good stock to buy? Quest Diagnostics Incorporated (NYSE:DGX) investors should be aware of an increase in enthusiasm from smart money lately. Quest Diagnostics Incorporated (NYSE:DGX) was in 36 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 46. Our calculations also showed that DGX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Cliff Asness of AQR Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind let’s take a peek at the new hedge fund action regarding Quest Diagnostics Incorporated (NYSE:DGX).
Do Hedge Funds Think DGX Is A Good Stock To Buy Now?
At the end of September, a total of 36 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 16% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in DGX over the last 25 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Renaissance Technologies, holds the most valuable position in Quest Diagnostics Incorporated (NYSE:DGX). Renaissance Technologies has a $140.6 million position in the stock, comprising 0.2% of its 13F portfolio. The second most bullish fund manager is Cliff Asness of AQR Capital Management, with a $119.5 million position; 0.2% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish comprise Ken Griffin’s Citadel Investment Group, John Overdeck and David Siegel’s Two Sigma Advisors and D. E. Shaw’s D E Shaw. In terms of the portfolio weights assigned to each position Te Ahumairangi Investment Management allocated the biggest weight to Quest Diagnostics Incorporated (NYSE:DGX), around 1.68% of its 13F portfolio. Sivik Global Healthcare is also relatively very bullish on the stock, setting aside 0.87 percent of its 13F equity portfolio to DGX.
As aggregate interest increased, key money managers were leading the bulls’ herd. Sivik Global Healthcare, managed by Krishen Sud, assembled the biggest position in Quest Diagnostics Incorporated (NYSE:DGX). Sivik Global Healthcare had $3.6 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also initiated a $3 million position during the quarter. The following funds were also among the new DGX investors: Brandon Haley’s Holocene Advisors, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Ronald Hua’s Qtron Investments.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Quest Diagnostics Incorporated (NYSE:DGX) but similarly valued. These stocks are SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), Teleflex Incorporated (NYSE:TFX), Domino’s Pizza, Inc. (NYSE:DPZ), J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), Pembina Pipeline Corp (NYSE:PBA), Western Digital Corporation (NASDAQ:WDC), and Pool Corporation (NASDAQ:POOL). All of these stocks’ market caps resemble DGX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SSNC | 51 | 2925436 | 2 |
| TFX | 26 | 579122 | -4 |
| DPZ | 36 | 2541766 | 5 |
| JBHT | 22 | 315309 | -4 |
| PBA | 8 | 62632 | -7 |
| WDC | 41 | 1103828 | -16 |
| POOL | 40 | 1136320 | 0 |
| Average | 32 | 1237773 | -3.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $1238 million. That figure was $488 million in DGX’s case. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is the most popular stock in this table. On the other hand Pembina Pipeline Corp (NYSE:PBA) is the least popular one with only 8 bullish hedge fund positions. Quest Diagnostics Incorporated (NYSE:DGX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for DGX is 66. 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 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately DGX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on DGX were disappointed as the stock returned 2.8% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
