Were Hedge Funds Right About ICON Public Limited Company (ICLR)?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought ICON Public Limited Company (NASDAQ:ICLR) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.

ICON Public Limited Company (NASDAQ:ICLR) was in 35 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 39. ICLR has seen a decrease in activity from the world’s largest hedge funds recently. There were 39 hedge funds in our database with ICLR holdings at the end of June. Our calculations also showed that ICLR 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. Now let’s take a gander at the recent hedge fund action encompassing ICON Public Limited Company (NASDAQ:ICLR).

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

At the end of the third quarter, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ICLR over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the most valuable position in ICON Public Limited Company (NASDAQ:ICLR). Renaissance Technologies has a $407.3 million position in the stock, comprising 0.5% of its 13F portfolio. Coming in second is Steadfast Capital Management, managed by Robert Pitts, which holds a $199.7 million position; the fund has 1.9% of its 13F portfolio invested in the stock. Some other members of the smart money that are bullish consist of John Overdeck and David Siegel’s Two Sigma Advisors, Israel Englander’s Millennium Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. In terms of the portfolio weights assigned to each position Montanaro Asset Management allocated the biggest weight to ICON Public Limited Company (NASDAQ:ICLR), around 6.79% of its 13F portfolio. Iron Triangle Partners is also relatively very bullish on the stock, setting aside 4.89 percent of its 13F equity portfolio to ICLR.

Seeing as ICON Public Limited Company (NASDAQ:ICLR) has witnessed a decline in interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of funds that elected to cut their positions entirely by the end of the third quarter. Intriguingly, Simon Sadler’s Segantii Capital sold off the biggest position of all the hedgies watched by Insider Monkey, totaling close to $31 million in stock. Alec Litowitz and Ross Laser’s fund, Magnetar Capital, also cut its stock, about $29.8 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest was cut by 4 funds by the end of the third quarter.

Let’s check out hedge fund activity in other stocks similar to ICON Public Limited Company (NASDAQ:ICLR). We will take a look at POSCO (NYSE:PKX), CarMax Inc (NYSE:KMX), Cerner Corporation (NASDAQ:CERN), Ameren Corporation (NYSE:AEE), CGI Inc. (NYSE:GIB), Charles River Laboratories International Inc. (NYSE:CRL), and Essex Property Trust Inc (NYSE:ESS). All of these stocks’ market caps resemble ICLR’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 26 hedge funds with bullish positions and the average amount invested in these stocks was $737 million. That figure was $1349 million in ICLR’s case. Charles River Laboratories International Inc. (NYSE:CRL) is the most popular stock in this table. On the other hand POSCO (NYSE:PKX) is the least popular one with only 11 bullish hedge fund positions. ICON Public Limited Company (NASDAQ:ICLR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ICLR is 62.2. 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. 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 still managed to beat the market by another 3.6 percentage points. Hedge funds were somewhat right about betting on ICLR as the stock returned 1.4% since the end of September (through January 31st) and outperformed the top 5 hedge fund stocks but not the market. This is a rare phenomenon as top hedge fund stocks usually beat the market over the long-term.

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

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