Coronavirus is probably the #1 concern in investors’ minds right now. It should be. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW. We predicted that a US recession is imminent and US stocks will go down by at least 20% in the next 3-6 months. We also told you to short the market ETFs and buy long-term bonds. Investors who agreed with us and replicated these trades are up double digits whereas the market is down double digits. Our article also called for a total international travel ban to prevent the spread of the coronavirus especially from Europe. We were one step ahead of the markets and the president.
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 835 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article we look at what those investors think of Sanofi (NYSE:SNY).
Sanofi (NYSE:SNY) was in 31 hedge funds’ portfolios at the end of December. SNY shareholders have witnessed an increase in enthusiasm from smart money in recent months. There were 28 hedge funds in our database with SNY holdings at the end of the previous quarter. Our calculations also showed that SNY isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video below for Q3 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are plenty of tools investors employ to appraise stocks. Two of the less utilized tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the top picks of the top fund managers can outpace the broader indices by a solid margin (see the details here).
Ken Fisher of Fisher Asset Management
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. In January, we recommended a long position in one of the most shorted stocks in the market, and that stock returned more than 50% despite the large losses in the market since our recommendation. Keeping this in mind let’s go over the latest hedge fund action encompassing Sanofi (NYSE:SNY).
How have hedgies been trading Sanofi (NYSE:SNY)?
Heading into the first quarter of 2020, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from one quarter earlier. By comparison, 23 hedge funds held shares or bullish call options in SNY a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Sanofi (NYSE:SNY) was held by Fisher Asset Management, which reported holding $880.9 million worth of stock at the end of September. It was followed by Balyasny Asset Management with a $32.3 million position. Other investors bullish on the company included Eversept Partners, Marshall Wace LLP, and Elliott Management. In terms of the portfolio weights assigned to each position Mason Capital Management allocated the biggest weight to Sanofi (NYSE:SNY), around 4.32% of its 13F portfolio. Eversept Partners is also relatively very bullish on the stock, earmarking 4.29 percent of its 13F equity portfolio to SNY.
As industrywide interest jumped, key money managers were leading the bulls’ herd. Integral Health Asset Management, managed by Bhagwan Jay Rao, established the largest position in Sanofi (NYSE:SNY). Integral Health Asset Management had $9.5 million invested in the company at the end of the quarter. Michael Castor’s Sio Capital also initiated a $8.6 million position during the quarter. The other funds with new positions in the stock are Kevin Molloy’s Iron Triangle Partners, Israel Englander’s Millennium Management, and Samuel Isaly’s OrbiMed Advisors.
Let’s now take a look at hedge fund activity in other stocks similar to Sanofi (NYSE:SNY). These stocks are Broadcom Inc (NASDAQ:AVGO), Union Pacific Corporation (NYSE:UNP), ASML Holding N.V. (NASDAQ:ASML), and Texas Instruments Incorporated (NASDAQ:TXN). This group of stocks’ market values are closest to SNY’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AVGO | 61 | 2513808 | 2 |
| UNP | 65 | 5313051 | -4 |
| ASML | 22 | 1133071 | 7 |
| TXN | 50 | 2386926 | -10 |
| Average | 49.5 | 2836714 | -1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 49.5 hedge funds with bullish positions and the average amount invested in these stocks was $2837 million. That figure was $1114 million in SNY’s case. Union Pacific Corporation (NYSE:UNP) is the most popular stock in this table. On the other hand ASML Holding N.V. (NASDAQ:ASML) is the least popular one with only 22 bullish hedge fund positions. Sanofi (NYSE:SNY) 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 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 11.7% in 2020 through March 11th but still beat the market by 3.1 percentage points. A small number of hedge funds were also right about betting on SNY as the stock returned -10.8% during the same time period and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
