Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Teleflex Incorporated (NYSE:TFX), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is TFX a good stock to buy now? Teleflex Incorporated (NYSE:TFX) has experienced an increase in enthusiasm from smart money lately. Teleflex Incorporated (NYSE:TFX) was in 40 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 32. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that TFX 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.
To most investors, hedge funds are perceived as unimportant, old financial tools of yesteryear. While there are more than 8000 funds with their doors open at present, Our researchers look at the crème de la crème of this group, around 850 funds. These investment experts watch over bulk of all hedge funds’ total capital, and by keeping an eye on their top stock picks, Insider Monkey has unearthed many investment strategies that have historically defeated Mr. Market. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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 go over the key hedge fund action surrounding Teleflex Incorporated (NYSE:TFX).
Do Hedge Funds Think TFX Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 40 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 43% from the second quarter of 2020. By comparison, 28 hedge funds held shares or bullish call options in TFX a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
More specifically, Marshall Wace LLP was the largest shareholder of Teleflex Incorporated (NYSE:TFX), with a stake worth $255 million reported as of the end of September. Trailing Marshall Wace LLP was Citadel Investment Group, which amassed a stake valued at $187.2 million. Healthcor Management LP, Rock Springs Capital Management, and Polar Capital 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 Healthcor Management LP allocated the biggest weight to Teleflex Incorporated (NYSE:TFX), around 2.25% of its 13F portfolio. Sectoral Asset Management is also relatively very bullish on the stock, earmarking 2.12 percent of its 13F equity portfolio to TFX.
As one would reasonably expect, key money managers were leading the bulls’ herd. Healthcor Management LP, managed by Arthur B Cohen and Joseph Healey, established the most outsized position in Teleflex Incorporated (NYSE:TFX). Healthcor Management LP had $56.2 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $10.3 million position during the quarter. The following funds were also among the new TFX investors: Paul Tudor Jones’s Tudor Investment Corp, Donald Sussman’s Paloma Partners, and Alexander West’s Blue Pool Capital.
Let’s now review hedge fund activity in other stocks similar to Teleflex Incorporated (NYSE:TFX). These stocks are CBRE Group, Inc. (NYSE:CBRE), Arista Networks Inc (NYSE:ANET), Invitation Homes Inc. (NYSE:INVH), Varian Medical Systems, Inc. (NYSE:VAR), Ventas, Inc. (NYSE:VTR), Dover Corporation (NYSE:DOV), and Avangrid, Inc. (NYSE:AGR). This group of stocks’ market values match TFX’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 28.4 hedge funds with bullish positions and the average amount invested in these stocks was $735 million. That figure was $753 million in TFX’s case. Varian Medical Systems, Inc. (NYSE:VAR) is the most popular stock in this table. On the other hand Avangrid, Inc. (NYSE:AGR) is the least popular one with only 11 bullish hedge fund positions. Teleflex Incorporated (NYSE:TFX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TFX is 75.4. 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 TFX as the stock returned 11.9% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.