Do Hedge Funds Love Bausch Health Companies Inc. (BHC)?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of September 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Bausch Health Companies Inc. (NYSE:BHC).

Bausch Health Companies Inc. (NYSE:BHC) has seen a decrease in support from the world’s most elite money managers recently. Bausch Health Companies Inc. (NYSE:BHC) was in 39 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 45. There were 45 hedge funds in our database with BHC holdings at the end of June. Our calculations also showed that BHC 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 review the key hedge fund action surrounding Bausch Health Companies Inc. (NYSE:BHC).

Steven Tananbaum of GoldenTree Asset Management

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

Heading into the fourth quarter of 2021, a total of 39 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BHC over the last 25 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Icahn Capital LP, managed by Carl Icahn, holds the largest position in Bausch Health Companies Inc. (NYSE:BHC). Icahn Capital LP has a $949.9 million position in the stock, comprising 4.2% of its 13F portfolio. The second most bullish fund manager is John Paulson of Paulson & Co, with a $719.6 million position; the fund has 20.5% of its 13F portfolio invested in the stock. Other peers that are bullish encompass Jeffrey Ubben’s ValueAct Capital, Larry Robbins’s Glenview Capital and Steven Tananbaum’s GoldenTree Asset Management. In terms of the portfolio weights assigned to each position Paulson & Co allocated the biggest weight to Bausch Health Companies Inc. (NYSE:BHC), around 20.5% of its 13F portfolio. Chou Associates Management is also relatively very bullish on the stock, designating 20.11 percent of its 13F equity portfolio to BHC.

Judging by the fact that Bausch Health Companies Inc. (NYSE:BHC) has witnessed declining sentiment from the smart money, logic holds that there was a specific group of hedgies that decided to sell off their entire stakes last quarter. Intriguingly, Neil Shahrestani’s Ikarian Capital dumped the biggest investment of the 750 funds watched by Insider Monkey, worth close to $16.1 million in call options. Himanshu Gulati’s fund, Antara Capital, also sold off its call options, about $14.7 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 6 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Bausch Health Companies Inc. (NYSE:BHC) but similarly valued. We will take a look at TD SYNNEX Corporation (NYSE:SNX), Deckers Outdoor Corp (NASDAQ:DECK), Five Below Inc (NASDAQ:FIVE), Cleveland-Cliffs Inc (NYSE:CLF), Norwegian Cruise Line Holdings Ltd (NYSE:NCLH), Guidewire Software Inc (NYSE:GWRE), and Hill-Rom Holdings, Inc. (NYSE:HRC). This group of stocks’ market caps resemble BHC’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 36.4 hedge funds with bullish positions and the average amount invested in these stocks was $1058 million. That figure was $3841 million in BHC’s case. Deckers Outdoor Corp (NASDAQ:DECK) is the most popular stock in this table. On the other hand TD SYNNEX Corporation (NYSE:SNX) is the least popular one with only 24 bullish hedge fund positions. Bausch Health Companies Inc. (BHC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BHC is 56.3. 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 positive signal but 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately BHC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BHC were disappointed as the stock returned -14.4% since the end of September (through 11/30) 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 many of these stocks already outperformed the market since 2019.

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