How do we determine whether Danaher Corporation (NYSE:DHR) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Hedge fund interest in Danaher Corporation (NYSE:DHR) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare DHR to other stocks including Colgate-Palmolive Company (NYSE:CL), Simon Property Group, Inc (NYSE:SPG), and Time Warner Inc (NYSE:TWX) to get a better sense of its popularity.
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Keeping this in mind, we’re going to take a gander at the new action surrounding Danaher Corporation (NYSE:DHR).
What does the smart money think about Danaher Corporation (NYSE:DHR)?
At Q3’s end, a total of 53 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from one quarter earlier. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, John Griffin’s Blue Ridge Capital has the most valuable position in Danaher Corporation (NYSE:DHR), worth close to $197.3 million, comprising 2.3% of its total 13F portfolio. On Blue Ridge Capital’s heels is Dan Loeb of Third Point, with a $191.7 million position; the fund has 1.8% of its 13F portfolio invested in the stock. Other peers that hold long positions comprise Phill Gross and Robert Atchinson’s Adage Capital Management, John Smith Clark’s Southpoint Capital Advisors and Ken Griffin’s Citadel Investment Group.
At the top of the heap, Doug Silverman and Alexander Klabin’s Senator Investment Group cut the largest stake of the “upper crust” of funds tracked by Insider Monkey, worth about $385.2 million in stock, and Robert Henry Lynch’s Aristeia Capital was right behind this move, as the fund dumped about $199.6 million worth. These transactions are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Danaher Corporation (NYSE:DHR) but similarly valued. These stocks are Colgate-Palmolive Company (NYSE:CL), Simon Property Group, Inc (NYSE:SPG), Time Warner Inc (NYSE:TWX), and Telefonica S.A. (ADR) (NYSE:TEF). This group of stocks’ market valuations are similar to DHR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CL | 31 | 1803185 | -4 |
| SPG | 30 | 1164516 | 2 |
| TWX | 69 | 4320751 | 1 |
| TEF | 5 | 10456 | -1 |
As you can see these stocks had an average of 33.75 hedge funds with bullish positions and the average amount invested in these stocks was $1,825 million. That figure was $1,976 million in DHR’s case. Time Warner Inc (NYSE:TWX) is the most popular stock in this table. On the other hand Telefonica S.A. (ADR) (NYSE:TEF) is the least popular one with only 5 bullish hedge fund positions. Danaher Corporation (NYSE:DHR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TWX might be a better candidate to consider a long position.
