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 LivaNova PLC (NASDAQ:LIVN) at the end of the third quarter and determine whether the smart money was really smart about this stock.
LivaNova PLC (NASDAQ:LIVN) has seen a decrease in hedge fund interest lately. LivaNova PLC (NASDAQ:LIVN) was in 32 hedge funds’ portfolios at the end of September. The all time high for this statistic is 36. There were 36 hedge funds in our database with LIVN positions at the end of the second quarter. Our calculations also showed that LIVN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Ricky Sandler of Eminence Capital
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 new hedge fund action encompassing LivaNova PLC (NASDAQ:LIVN).
Do Hedge Funds Think LIVN Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards LIVN over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Redmile Group held the most valuable stake in LivaNova PLC (NASDAQ:LIVN), which was worth $173.5 million at the end of the third quarter. On the second spot was Eminence Capital which amassed $138.7 million worth of shares. Millennium Management, Paradice Investment Management, and Sachem Head Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Hawk Ridge Management allocated the biggest weight to LivaNova PLC (NASDAQ:LIVN), around 5.43% of its 13F portfolio. Paradice Investment Management is also relatively very bullish on the stock, dishing out 4.45 percent of its 13F equity portfolio to LIVN.
Judging by the fact that LivaNova PLC (NASDAQ:LIVN) has experienced declining sentiment from the entirety of the hedge funds we track, we can see that there was a specific group of hedgies that slashed their entire stakes in the third quarter. Interestingly, Matthew Stadelman’s Diamond Hill Capital dumped the biggest stake of all the hedgies watched by Insider Monkey, totaling an estimated $34.3 million in stock. Kerr Neilson’s fund, Platinum Asset Management, also dumped its stock, about $2.3 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 4 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as LivaNova PLC (NASDAQ:LIVN) but similarly valued. These stocks are UFP Industries, Inc. (NASDAQ:UFPI), Nordstrom, Inc. (NYSE:JWN), Sanderson Farms, Inc. (NASDAQ:SAFM), Portland General Electric Company (NYSE:POR), Hannon Armstrong Sustnbl Infrstr Cap Inc (NYSE:HASI), Shutterstock Inc (NYSE:SSTK), and Daqo New Energy Corp (NYSE:DQ). This group of stocks’ market valuations are similar to LIVN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UFPI | 17 | 143498 | 4 |
| JWN | 25 | 365461 | -6 |
| SAFM | 31 | 571707 | -2 |
| POR | 15 | 80234 | -6 |
| HASI | 15 | 139078 | 5 |
| SSTK | 19 | 234636 | 1 |
| DQ | 18 | 221632 | 1 |
| Average | 20 | 250892 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $251 million. That figure was $1140 million in LIVN’s case. Sanderson Farms, Inc. (NASDAQ:SAFM) is the most popular stock in this table. On the other hand Portland General Electric Company (NYSE:POR) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks LivaNova PLC (NASDAQ:LIVN) is more popular among hedge funds. Our overall hedge fund sentiment score for LIVN is 77.7. 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 beat the market by 3.6 percentage points. Unfortunately, LIVN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LIVN were disappointed as the stock returned -5.2% since the end of the third quarter (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.
