Is Viatris (VTRS) Stock A Buy or Sell?

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Viatris Inc. (NASDAQ:VTRS) in this article.

Is VTRS stock a buy or sell? Viatris Inc. (NASDAQ:VTRS) has seen an increase in hedge fund sentiment lately. Viatris Inc. (NASDAQ:VTRS) was in 67 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 74. There were 48 hedge funds in our database with VTRS holdings at the end of September. Our calculations also showed that VTRS isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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 has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here).

James Flynn Deerfield Management

James E. Flynn of Deerfield Management

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). With all of this in mind let’s take a look at the fresh hedge fund action surrounding Viatris Inc. (NASDAQ:VTRS).

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

At fourth quarter’s end, a total of 67 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 40% from the previous quarter. The graph below displays the number of hedge funds with bullish position in VTRS over the last 22 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

Among these funds, Laurion Capital Management held the most valuable stake in Viatris Inc. (NASDAQ:VTRS), which was worth $435.4 million at the end of the fourth quarter. On the second spot was Pzena Investment Management which amassed $320.2 million worth of shares. Deerfield Management, Camber Capital Management, and Slate Path 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 Slate Path Capital allocated the biggest weight to Viatris Inc. (NASDAQ:VTRS), around 12% of its 13F portfolio. Courage Capital is also relatively very bullish on the stock, dishing out 10.74 percent of its 13F equity portfolio to VTRS.

With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Laurion Capital Management, managed by Benjamin A. Smith, created the most valuable position in Viatris Inc. (NASDAQ:VTRS). Laurion Capital Management had $435.4 million invested in the company at the end of the quarter. Richard S. Pzena’s Pzena Investment Management also made a $320.2 million investment in the stock during the quarter. The other funds with brand new VTRS positions are James E. Flynn’s Deerfield Management, Stephen DuBois’s Camber Capital Management, and David Greenspan’s Slate Path Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Viatris Inc. (NASDAQ:VTRS) but similarly valued. We will take a look at MPLX LP (NYSE:MPLX), Deutsche Bank Aktiengesellschaft (NYSE:DB), Wayfair Inc (NYSE:W), Etsy Inc (NASDAQ:ETSY), AvalonBay Communities Inc (NYSE:AVB), China Telecom Corporation Limited (NYSE:CHA), and Enphase Energy Inc (NASDAQ:ENPH). This group of stocks’ market values are closest to VTRS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MPLX 13 142057 -1
DB 16 1649538 1
W 40 2845135 0
ETSY 56 1963085 5
AVB 32 864498 3
CHA 5 19901 2
ENPH 48 988127 6
Average 30 1210334 2.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $1210 million. That figure was $2754 million in VTRS’s case. Etsy Inc (NASDAQ:ETSY) is the most popular stock in this table. On the other hand China Telecom Corporation Limited (NYSE:CHA) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Viatris Inc. (NASDAQ:VTRS) is more popular among hedge funds. Our overall hedge fund sentiment score for VTRS is 87.2. 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 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 still beat the market by 0.8 percentage points. Unfortunately VTRS wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on VTRS were disappointed as the stock returned -21.1% since the end of the fourth quarter (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 most of these stocks already outperformed the market since 2019.

Follow Viatris Inc

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