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 Steris Plc (NYSE:STE) based on that data and determine whether they were really smart about the stock.
Steris Plc (NYSE:STE) was in 34 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 40. STE investors should be aware of a decrease in hedge fund sentiment lately. There were 35 hedge funds in our database with STE holdings at the end of June. Our calculations also showed that STE isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Israel Englander of Millennium 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. Keeping this in mind let’s take a look at the key hedge fund action encompassing Steris Plc (NYSE:STE).
Do Hedge Funds Think STE Is A Good Stock To Buy Now?
At third quarter’s end, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the previous quarter. By comparison, 30 hedge funds held shares or bullish call options in STE a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Generation Investment Management held the most valuable stake in Steris Plc (NYSE:STE), which was worth $637 million at the end of the third quarter. On the second spot was Select Equity Group which amassed $327 million worth of shares. Echo Street Capital Management, Fisher Asset Management, and Polar 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 Diker Management allocated the biggest weight to Steris Plc (NYSE:STE), around 29.93% of its 13F portfolio. Generation Investment Management is also relatively very bullish on the stock, designating 2.65 percent of its 13F equity portfolio to STE.
Due to the fact that Steris Plc (NYSE:STE) has experienced bearish sentiment from the entirety of the hedge funds we track, logic holds that there was a specific group of hedgies that slashed their positions entirely by the end of the third quarter. Interestingly, Andrew Sandler’s Sandler Capital Management sold off the biggest position of the “upper crust” of funds followed by Insider Monkey, totaling about $5.7 million in stock. Ryan Tolkin (CIO)’s fund, Schonfeld Strategic Advisors, also dropped its stock, about $1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest was cut by 1 funds by the end of the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Steris Plc (NYSE:STE) but similarly valued. These stocks are The Cooper Companies, Inc. (NYSE:COO), 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 (NASDAQ:EXPD), and Teladoc Health, Inc (NYSE:TDOC). All of these stocks’ market caps are similar to STE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| COO | 37 | 1403322 | 4 |
| RF | 28 | 204669 | -5 |
| CLX | 34 | 971875 | -3 |
| CVE | 30 | 717847 | -2 |
| CHD | 20 | 1362889 | -15 |
| EXPD | 26 | 452843 | -3 |
| TDOC | 40 | 2836350 | -3 |
| Average | 30.7 | 1135685 | -3.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.7 hedge funds with bullish positions and the average amount invested in these stocks was $1136 million. That figure was $1733 million in STE’s case. Teladoc Health, Inc (NYSE:TDOC) 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. Steris Plc (NYSE:STE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for STE is 64.5. 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. Hedge funds were also right about betting on STE as the stock returned 10.1% since the end of Q3 (through 1/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
