Is SYNH A Good Stock To Buy Now?

Is Syneos Health, Inc. (NASDAQ:SYNH) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.

Is SYNH a good stock to buy now? Syneos Health, Inc. (NASDAQ:SYNH) investors should be aware of an increase in activity from the world’s largest hedge funds recently. Syneos Health, Inc. (NASDAQ:SYNH) was in 40 hedge funds’ portfolios at the end of September. The all time high for this statistic is 29. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 29 hedge funds in our database with SYNH positions at the end of the second quarter. Our calculations also showed that SYNH isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).

Video: Watch our video about the top 5 most popular hedge fund stocks.

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. 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 66 percentage points since March 2017 (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 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Jeffrey Talpins of Element Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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 website. Keeping this in mind let’s analyze the key hedge fund action encompassing Syneos Health, Inc. (NASDAQ:SYNH).

Do Hedge Funds Think SYNH Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of 38% from the second quarter of 2020. By comparison, 21 hedge funds held shares or bullish call options in SYNH a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Ken Griffin’s Citadel Investment Group has the number one position in Syneos Health, Inc. (NASDAQ:SYNH), worth close to $64.3 million, amounting to less than 0.1%% of its total 13F portfolio. Sitting at the No. 2 spot is Polar Capital, led by Brian Ashford-Russell and Tim Woolley, holding a $49.8 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions encompass Amy Minella’s Cardinal Capital, Alok Agrawal’s Bloom Tree Partners and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Element Capital Management allocated the biggest weight to Syneos Health, Inc. (NASDAQ:SYNH), around 3.41% of its 13F portfolio. Bloom Tree Partners is also relatively very bullish on the stock, dishing out 3.06 percent of its 13F equity portfolio to SYNH.

With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Bloom Tree Partners, managed by Alok Agrawal, assembled the largest position in Syneos Health, Inc. (NASDAQ:SYNH). Bloom Tree Partners had $30 million invested in the company at the end of the quarter. Sander Gerber’s Hudson Bay Capital Management also made a $21.3 million investment in the stock during the quarter. The other funds with brand new SYNH positions are Jeffrey Talpins’s Element Capital Management, David Costen Haley’s HBK Investments, and Michael Rockefeller and KarláKroeker’s Woodline Partners.

Let’s now review hedge fund activity in other stocks similar to Syneos Health, Inc. (NASDAQ:SYNH). We will take a look at Bausch Health Companies Inc. (NYSE:BHC), ANGI Homeservices Inc (NASDAQ:ANGI), Hanesbrands Inc. (NYSE:HBI), Emergent Biosolutions Inc (NYSE:EBS), Lincoln Electric Holdings, Inc. (NASDAQ:LECO), Leggett & Platt, Inc. (NYSE:LEG), and Clearway Energy, Inc. (NYSE:CWEN). This group of stocks’ market values resemble SYNH’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
BHC 40 1603661 5
ANGI 42 348795 -6
HBI 36 771352 5
EBS 22 151540 1
LECO 24 266760 2
LEG 26 135068 -3
CWEN 19 256069 0
Average 29.9 504749 0.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 29.9 hedge funds with bullish positions and the average amount invested in these stocks was $505 million. That figure was $406 million in SYNH’s case. ANGI Homeservices Inc (NASDAQ:ANGI) is the most popular stock in this table. On the other hand Clearway Energy, Inc. (NYSE:CWEN) is the least popular one with only 19 bullish hedge fund positions. Syneos Health, Inc. (NASDAQ:SYNH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SYNH is 85.7. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on SYNH as the stock returned 21.3% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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