Do Hedge Funds Love Cooper Companies, Inc. (COO)?

Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.

Is Cooper Companies, Inc. (NYSE:COO) a worthy investment now? Money managers are buying. The number of long hedge fund bets improved by 2 in recent months. Cooper Companies, Inc. (NYSE:COO) was in 29 hedge funds’ portfolios at the end of the third quarter of 2015. There were 27 hedge funds in our database with Cooper Companies, Inc. (NYSE:COO) positions at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article, we will examine companies such as VimpelCom Ltd (ADR) (NASDAQ:VIP), Mednax Inc. (NYSE:MD), and Arthur J. Gallagher & Co. (NYSE:AJG) to gather more data points.

In today’s marketplace, there are plenty of formulas market participants put to use to value their stock investments. A couple of the most underrated formulas are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can outperform the market by a significant amount (see the details here).

With all of this in mind, we’re going to check out the latest action surrounding Cooper Companies, Inc. (NYSE:COO).

How are hedge funds trading Cooper Companies, Inc. (NYSE:COO)?

At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 7% from one quarter earlier. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, OrbiMed Advisors, managed by Samuel Isaly, holds the most valuable position in The Cooper Companies, Inc. (NYSE:COO). OrbiMed Advisors has a $193.7 million position in the stock, comprising 2% of its 13F portfolio. On OrbiMed Advisors’s heels is Paul Marshall and Ian Wace of Marshall Wace LLP, with a $71.5 million position; 0.9% of its 13F portfolio is allocated to the company. Other professional money managers with similar optimism encompass Anand Parekh’s Alyeska Investment Group, Ken Griffin’s Citadel Investment Group and Paul Sinclair’s Blue Jay Capital Management.

As industrywide interest jumped, some big names have been driving this bullishness. Nebula Capital, managed by Aleem Mawji, created the biggest position in Cooper Companies, Inc. (NYSE:COO). Nebula Capital had $6.7 million invested in the company at the end of the quarter. Glenn Russell Dubin’s Highbridge Capital Management also made a $5.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Sahm Adrangi’s Kerrisdale Capital, D E Shaw, and David Steinberg and Eric Udoff’s Marlowe Partners.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Cooper Companies, Inc. (NYSE:COO) but similarly valued. These stocks are VimpelCom Ltd (ADR) (NASDAQ:VIP), Mednax Inc. (NYSE:MD), Arthur J. Gallagher & Co. (NYSE:AJG), and Synopsys, Inc. (NASDAQ:SNPS). This group of stocks’ market values is similar to Cooper Companies, Inc. (NYSE:COO)’s market value.

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 $185 million. That figure was $533 million in Cooper Companies, Inc. (NYSE:COO)’s case. Mednax Inc. (NYSE:MD) is the most popular stock in this table. On the other hand VimpelCom Ltd (ADR) (NASDAQ:VIP) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks, Cooper Companies, Inc. (NYSE:COO) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.