Were Hedge Funds Right About AstraZeneca plc (AZN)?

Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of AstraZeneca plc (NASDAQ:AZN) based on that data and determine whether they were really smart about the stock.

Is AstraZeneca plc (NASDAQ:AZN) a first-rate investment now? Money managers were buying. The number of bullish hedge fund bets went up by 4 in recent months. AstraZeneca plc (NASDAQ:AZN) was in 41 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 41. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that AZN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

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 we’re going to go over the key hedge fund action encompassing AstraZeneca plc (NASDAQ:AZN).

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

At Q3’s end, a total of 41 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from one quarter earlier. On the other hand, there were a total of 33 hedge funds with a bullish position in AZN a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Ken Fisher’s Fisher Asset Management has the number one position in AstraZeneca plc (NASDAQ:AZN), worth close to $1.1766 billion, comprising 0.7% of its total 13F portfolio. On Fisher Asset Management’s heels is Rajiv Jain of GQG Partners, with a $1.1098 billion position; 3% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that are bullish consist of Renaissance Technologies, Phill Gross and Robert Atchinson’s Adage Capital Management and Steve Cohen’s Point72 Asset Management. In terms of the portfolio weights assigned to each position Sphera Global Healthcare Fund allocated the biggest weight to AstraZeneca plc (NASDAQ:AZN), around 6.52% of its 13F portfolio. Healthcare Value Capital is also relatively very bullish on the stock, dishing out 5.93 percent of its 13F equity portfolio to AZN.

Now, specific money managers have jumped into AstraZeneca plc (NASDAQ:AZN) headfirst. Adage Capital Management, managed by Phill Gross and Robert Atchinson, assembled the biggest position in AstraZeneca plc (NASDAQ:AZN). Adage Capital Management had $169 million invested in the company at the end of the quarter. Zach Schreiber’s Point State Capital also made a $97.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Farallon Capital, Kevin Molloy’s Iron Triangle Partners, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

Let’s now review hedge fund activity in other stocks similar to AstraZeneca plc (NASDAQ:AZN). These stocks are Novartis AG (NYSE:NVS), McDonald’s Corporation (NYSE:MCD), Morgan Stanley (NYSE:MS), Texas Instruments Incorporated (NASDAQ:TXN), Sea Limited (NYSE:SE), Shopify Inc (NYSE:SHOP), and Medtronic plc (NYSE:MDT). This group of stocks’ market values resemble AZN’s market value.

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As you can see these stocks had an average of 62.4 hedge funds with bullish positions and the average amount invested in these stocks was $5654 million. That figure was $3757 million in AZN’s case. Sea Limited (NYSE:SE) is the most popular stock in this table. On the other hand Novartis AG (NYSE:NVS) is the least popular one with only 22 bullish hedge fund positions. AstraZeneca plc (NASDAQ:AZN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AZN is 49. 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 negative signal and 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 surpassed the market again by 3.6 percentage points. Unfortunately, AZN wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); AZN investors were disappointed as the stock returned -3.1% 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.