Was The Smart Money Right About The Cooper Companies, Inc. (COO)?

Stocks, especially the once high flying technology stocks, had a lousy start to the new year. QQQ lost 9% of its value in January. We aren’t certain about the bubbly technology stocks that trade for ridiculously high multiples of their revenues, but we believe top hedge fund stocks will deliver positive returns for the rest of the year. In this article, we will take a closer look at hedge fund sentiment towards The Cooper Companies, Inc. (NYSE:COO) at the end of the third quarter and determine whether the smart money was really smart about this stock.

Is The Cooper Companies, Inc. (NYSE:COO) a good investment right now? Money managers were getting more bullish. The number of long hedge fund positions improved by 4 in recent months. The Cooper Companies, Inc. (NYSE:COO) was in 37 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 43. Our calculations also showed that COO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 33 hedge funds in our database with COO positions at the end of the second quarter.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind let’s view the latest hedge fund action encompassing The Cooper Companies, Inc. (NYSE:COO).

Dmitry Balyasny of Balyasny Asset Managemnet

Dmitry Balyasny of Balyasny Asset Management

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

At third quarter’s end, a total of 37 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 12% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards COO over the last 25 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in The Cooper Companies, Inc. (NYSE:COO) was held by Generation Investment Management, which reported holding $661.1 million worth of stock at the end of September. It was followed by Impax Asset Management with a $84 million position. Other investors bullish on the company included Intermede Investment Partners, Two Sigma Advisors, and Woodline Partners. In terms of the portfolio weights assigned to each position Generation Investment Management allocated the biggest weight to The Cooper Companies, Inc. (NYSE:COO), around 2.75% of its 13F portfolio. Parkman Healthcare Partners is also relatively very bullish on the stock, designating 2.52 percent of its 13F equity portfolio to COO.

As one would reasonably expect, some big names have been driving this bullishness. Impax Asset Management, managed by Ian Simm, established the biggest position in The Cooper Companies, Inc. (NYSE:COO). Impax Asset Management had $84 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $24.9 million position during the quarter. The other funds with brand new COO positions are Steve Cohen’s Point72 Asset Management, Efrem Kamen’s Pura Vida Investments, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s also examine hedge fund activity in other stocks similar to The Cooper Companies, Inc. (NYSE:COO). We will take a look at Regions Financial Corporation (NYSE:RF), The Clorox Company (NYSE:CLX), Cenovus Energy Inc (NYSE:CVE), Church & Dwight Co., Inc. (NYSE:CHD), Expeditors International of Washington, Inc. (NASDAQ:EXPD), Teladoc Health, Inc (NYSE:TDOC), and Enphase Energy Inc (NASDAQ:ENPH). This group of stocks’ market values resemble COO’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RF 28 204669 -5
CLX 34 971875 -3
CVE 30 717847 -2
CHD 20 1362889 -15
EXPD 26 452843 -3
TDOC 40 2836350 -3
ENPH 52 637786 8
Average 32.9 1026323 -3.3

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.9 hedge funds with bullish positions and the average amount invested in these stocks was $1026 million. That figure was $1403 million in COO’s case. Enphase Energy Inc (NASDAQ:ENPH) is the most popular stock in this table. On the other hand Church & Dwight Co., Inc. (NYSE:CHD) is the least popular one with only 20 bullish hedge fund positions. The Cooper Companies, Inc. (NYSE:COO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for COO is 61.4. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, COO wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on COO were disappointed as the stock returned -3.6% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.

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