How do you pick the next stock to invest in? One way would be to spend hours of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Quintiles Transnational Holdings Inc (NYSE:Q).
Quintiles Transnational Holdings Inc was in 34 hedge funds’ portfolios at the end of September. Q has experienced an increase in hedge fund interest lately. There were 29 hedge funds in our database with Q holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as ArcelorMittal (ADR) (NYSE:MT), Westinghouse Air Brake Technologies Corp (NYSE:WAB), and Huntington Bancshares Incorporated (NASDAQ:HBAN) to gather more data points.
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With all of this in mind, we’re going to go over the recent action regarding Quintiles Transnational Holdings Inc (NYSE:Q).
How have hedgies been trading Quintiles Transnational Holdings Inc (NYSE:Q)?
At the end of the third quarter, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from the second quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the biggest position in Quintiles Transnational Holdings Inc (NYSE:Q). AQR Capital Management has a $85.1 million position in the stock, comprising 0.2% of its 13F portfolio. On AQR Capital Management’s heels is D E Shaw, holding a $77.4 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining peers that hold long positions consist of Bain Capital’s Brookside Capital, Israel Englander’s Millennium Management and Phill Gross and Robert Atchinson’s Adage Capital Management.
With a general bullishness amongst the heavyweights, key money managers were breaking ground themselves. Arrowgrass Capital Partners, managed by Nick Niell, assembled the biggest position in Quintiles Transnational Holdings Inc (NYSE:Q). Arrowgrass Capital Partners had $5.9 million invested in the company at the end of the quarter. James Dondero’s Highland Capital Management also made a $5.7 million investment in the stock during the quarter. The other funds with new positions in the stock are D E Shaw, Jacob Gottlieb’s Visium Asset Management, and George Hall’s Clinton Group.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Quintiles Transnational Holdings Inc (NYSE:Q) but similarly valued. These stocks are ArcelorMittal (ADR) (NYSE:MT), Westinghouse Air Brake Technologies Corp (NYSE:WAB), Huntington Bancshares Incorporated (NASDAQ:HBAN), and Newmont Mining Corp (NYSE:NEM). This group of stocks’ market valuations are similar to Q’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MT | 18 | 231752 | -4 |
| WAB | 27 | 297771 | -6 |
| HBAN | 20 | 112883 | -4 |
| NEM | 37 | 536115 | -1 |
As you can see these stocks had an average of 25.5 hedge funds with bullish positions and the average amount invested in these stocks was $295 million. That figure was $467 million in Q’s case. Newmont Mining Corp (NYSE:NEM) is the most popular stock in this table. On the other hand ArcelorMittal (ADR) (NYSE:MT) is the least popular one with only 18 bullish hedge fund positions. Quintiles Transnational Holdings Inc (NYSE:Q) 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 NEM might be a better candidate to consider a long position.