Should You Buy Infosys Ltd ADR (INFY)?

As one would reasonably expect, key hedge funds have jumped into Infosys Ltd ADR (NYSE:INFY) headfirst. Lee Munder Capital Group, managed by Lee Munder, established the biggest position in Infosys Ltd ADR (NYSE:INFY). Lee Munder Capital Group had $22.9 million invested in the company at the end of the quarter. Howard Marks’s Oaktree Capital Management also initiated a $9 million position during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Noam Gottesman’s GLG Partners.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Infosys Ltd ADR (NYSE:INFY) but similarly valued. These stocks are Netflix, Inc. (NASDAQ:NFLX), E I Du Pont De Nemours And Co (NYSE:DD), The Bank of New York Mellon Corporation (NYSE:BK), and McKesson Corporation (NYSE:MCK). All of these stocks’ market caps resemble INFY’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NFLX 57 6509142 7
DD 41 2844709 -5
BK 49 5803948 -13
MCK 68 3316354 6

As you can see these stocks had an average of 54 hedge funds with bullish positions and the average amount invested in these stocks was $4.62 billion. That figure was $892 million in INFY’s case. McKesson Corporation (NYSE:MCK) is the most popular stock in this table. On the other hand E I Du Pont De Nemours And Co (NYSE:DD) is the least popular one with only 41 bullish hedge fund positions. Compared to these stocks Infosys Ltd ADR (NYSE:INFY) is even less popular than DD. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.