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Is Zimmer Biomet Holdings Inc (ZBH) a Good Stock To Buy?

Seeing as Zimmer Biomet Holdings Inc (NYSE:ZBH) has experienced falling interest from the smart money, it’s safe to say that there were a few money managers that elected to cut their entire stakes by the end of the third quarter. Interestingly, Eric Mindich’s Eton Park Capital dumped the largest stake of all the hedgies monitored by Insider Monkey, totaling about $124.8 million in call options. Nick Niell’s fund, Arrowgrass Capital Partners, also dropped its call options, about $109.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 4 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Zimmer Biomet Holdings Inc (NYSE:ZBH) but similarly valued. These stocks are Hartford Financial Services Group Inc (NYSE:HIG), TELUS Corporation (USA) (NYSE:TU), Fidelity National Information Services (NYSE:FIS), and Ventas, Inc. (NYSE:VTR). This group of stocks’ market values resemble ZBH’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HIG 51 1189857 8
TU 11 154406 -5
FIS 34 1570699 0
VTR 22 465222 -2

As you can see these stocks had an average of 29.5 hedge funds with bullish positions and the average amount invested in these stocks was $845 million. That figure was $683 million in ZBH’s case. Hartford Financial Services Group Inc (NYSE:HIG) is the most popular stock in this table. On the other hand TELUS Corporation (USA) (NYSE:TU) is the least popular one with only 11 bullish hedge fund positions. Zimmer Biomet Holdings Inc (NYSE:ZBH) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard HIG might be a better candidate to consider a long position.

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