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 Thermo Fisher Scientific Inc. (NYSE:TMO) based on that data and determine whether they were really smart about the stock.
Thermo Fisher Scientific Inc. (NYSE:TMO) was in 94 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 89. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. TMO investors should be aware of an increase in support from the world’s most elite money managers of late. There were 87 hedge funds in our database with TMO holdings at the end of June. Our calculations also showed that TMO ranked #23 among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Aaron Cowen of Suvretta Capital Management
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 take a peek at the fresh hedge fund action surrounding Thermo Fisher Scientific Inc. (NYSE:TMO).
Do Hedge Funds Think TMO Is A Good Stock To Buy Now?
At third quarter’s end, a total of 94 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from the second quarter of 2021. On the other hand, there were a total of 80 hedge funds with a bullish position in TMO a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Fisher Asset Management held the most valuable stake in Thermo Fisher Scientific Inc. (NYSE:TMO), which was worth $1149.8 million at the end of the third quarter. On the second spot was Generation Investment Management which amassed $962.4 million worth of shares. Ako Capital, AQR Capital Management, and Farallon 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 Copernicus Capital Management allocated the biggest weight to Thermo Fisher Scientific Inc. (NYSE:TMO), around 13.83% of its 13F portfolio. Cryder Capital is also relatively very bullish on the stock, setting aside 11.03 percent of its 13F equity portfolio to TMO.
As one would reasonably expect, key hedge funds have jumped into Thermo Fisher Scientific Inc. (NYSE:TMO) headfirst. Suvretta Capital Management, managed by Aaron Cowen, established the most outsized position in Thermo Fisher Scientific Inc. (NYSE:TMO). Suvretta Capital Management had $186.1 million invested in the company at the end of the quarter. Doug Silverman and Alexander Klabin’s Senator Investment Group also made a $71.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Anand Parekh’s Alyeska Investment Group, Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital, and Louis Bacon’s Moore Global Investments.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Thermo Fisher Scientific Inc. (NYSE:TMO) but similarly valued. We will take a look at Verizon Communications Inc. (NYSE:VZ), Eli Lilly and Company (NYSE:LLY), Novo Nordisk A/S (NYSE:NVO), Danaher Corporation (NYSE:DHR), Intel Corporation (NASDAQ:INTC), Abbott Laboratories (NYSE:ABT), and PepsiCo, Inc. (NYSE:PEP). This group of stocks’ market valuations resemble TMO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VZ | 57 | 10359205 | -6 |
| LLY | 62 | 4287033 | -2 |
| NVO | 27 | 4053265 | 7 |
| DHR | 74 | 6946837 | -4 |
| INTC | 66 | 6472854 | -12 |
| ABT | 63 | 3611527 | 2 |
| PEP | 61 | 4435441 | -5 |
| Average | 58.6 | 5738023 | -2.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 58.6 hedge funds with bullish positions and the average amount invested in these stocks was $5738 million. That figure was $8210 million in TMO’s case. Danaher Corporation (NYSE:DHR) is the most popular stock in this table. On the other hand Novo Nordisk A/S (NYSE:NVO) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks Thermo Fisher Scientific Inc. (NYSE:TMO) is more popular among hedge funds. Our overall hedge fund sentiment score for TMO is 90. 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 TMO as the stock returned 1.8% 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.
