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 have processed the filings of the more than 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider Varian Medical Systems, Inc. (NYSE:VAR) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is VAR stock a buy or sell? Prominent investors were getting less optimistic. The number of long hedge fund positions dropped by 3 lately. Varian Medical Systems, Inc. (NYSE:VAR) was in 49 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 52. Our calculations also showed that VAR isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
At Insider Monkey we leave no stone unturned when looking for 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 hydrogen fuel cell 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 (or at the end of this article). Keeping this in mind let’s review the fresh hedge fund action surrounding Varian Medical Systems, Inc. (NYSE:VAR).
Do Hedge Funds Think VAR Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 49 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -6% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards VAR over the last 22 quarters. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
Among these funds, Millennium Management held the most valuable stake in Varian Medical Systems, Inc. (NYSE:VAR), which was worth $268.5 million at the end of the fourth quarter. On the second spot was Pentwater Capital Management which amassed $242.4 million worth of shares. Segantii Capital, Alpine Associates, and Magnetar 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 Halcyon Asset Management allocated the biggest weight to Varian Medical Systems, Inc. (NYSE:VAR), around 9.22% of its 13F portfolio. Segantii Capital is also relatively very bullish on the stock, setting aside 7.99 percent of its 13F equity portfolio to VAR.
Because Varian Medical Systems, Inc. (NYSE:VAR) has experienced bearish sentiment from hedge fund managers, it’s easy to see that there exists a select few hedge funds that decided to sell off their entire stakes in the fourth quarter. It’s worth mentioning that David Blood and Al Gore’s Generation Investment Management cut the biggest investment of all the hedgies followed by Insider Monkey, comprising about $225.1 million in stock, and Daniel S. Och’s OZ Management was right behind this move, as the fund said goodbye to about $57.6 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 3 funds in the fourth quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Varian Medical Systems, Inc. (NYSE:VAR) but similarly valued. These stocks are BioMarin Pharmaceutical Inc. (NASDAQ:BMRN), SK Telecom Co., Ltd. (NYSE:SKM), GoodRx Holdings, Inc. (NASDAQ:GDRX), Korea Electric Power Corporation (NYSE:KEP), Ceridian HCM Holding Inc. (NYSE:CDAY), Cardinal Health, Inc. (NYSE:CAH), and Albemarle Corporation (NYSE:ALB). This group of stocks’ market caps are closest to VAR’s market cap.
|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 27.1 hedge funds with bullish positions and the average amount invested in these stocks was $700 million. That figure was $2414 million in VAR’s case. BioMarin Pharmaceutical Inc. (NASDAQ:BMRN) is the most popular stock in this table. On the other hand SK Telecom Co., Ltd. (NYSE:SKM) is the least popular one with only 4 bullish hedge fund positions. Varian Medical Systems, Inc. (NYSE:VAR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VAR is 78.1. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately VAR wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on VAR were disappointed as the stock returned 0.8% since the end of December (through 3/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 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.