How do we determine whether Envista Holdings Corporation (NYSE:NVST) 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.
Envista Holdings Corporation (NYSE:NVST) was in 21 hedge funds’ portfolios at the end of the third quarter of 2019. NVST investors should be aware of an increase in enthusiasm from smart money recently. There were 0 hedge funds in our database with NVST holdings at the end of the previous quarter. Our calculations also showed that NVST isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To most traders, hedge funds are seen as worthless, old investment tools of yesteryear. While there are over 8000 funds in operation today, Our experts hone in on the top tier of this club, about 750 funds. These investment experts oversee the lion’s share of the smart money’s total asset base, and by watching their best equity investments, Insider Monkey has figured out various investment strategies that have historically surpassed Mr. Market. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Daniel Sundheim of D1 Capital Partners
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. With all of this in mind we’re going to check out the latest hedge fund action surrounding Envista Holdings Corporation (NYSE:NVST).
What does smart money think about Envista Holdings Corporation (NYSE:NVST)?
Heading into the fourth quarter of 2019, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 21 from one quarter earlier. On the other hand, there were a total of 0 hedge funds with a bullish position in NVST 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.
More specifically, Gates Capital Management was the largest shareholder of Envista Holdings Corporation (NYSE:NVST), with a stake worth $33.4 million reported as of the end of September. Trailing Gates Capital Management was Viking Global, which amassed a stake valued at $32 million. Third Point, D1 Capital Partners, and Balyasny Asset Management 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 Eversept Partners allocated the biggest weight to Envista Holdings Corporation (NYSE:NVST), around 2.77% of its 13F portfolio. Gates Capital Management is also relatively very bullish on the stock, dishing out 1.45 percent of its 13F equity portfolio to NVST.
With a general bullishness amongst the heavyweights, key hedge funds have been driving this bullishness. Gates Capital Management, managed by Jeffrey Gates, established the most outsized position in Envista Holdings Corporation (NYSE:NVST). Gates Capital Management had $33.4 million invested in the company at the end of the quarter. Andreas Halvorsen’s Viking Global also made a $32 million investment in the stock during the quarter. The other funds with new positions in the stock are Dan Loeb’s Third Point, Daniel Sundheim’s D1 Capital Partners, and Dmitry Balyasny’s Balyasny Asset Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Envista Holdings Corporation (NYSE:NVST) but similarly valued. These stocks are The Boston Beer Company Inc (NYSE:SAM), Helmerich & Payne, Inc. (NYSE:HP), Assured Guaranty Ltd. (NYSE:AGO), and China Biologic Products Holdings, Inc. (NASDAQ:CBPO). This group of stocks’ market valuations resemble NVST’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SAM | 29 | 661168 | 6 |
| HP | 28 | 270247 | -5 |
| AGO | 35 | 576379 | -1 |
| CBPO | 14 | 504724 | 5 |
| Average | 26.5 | 503130 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 26.5 hedge funds with bullish positions and the average amount invested in these stocks was $503 million. That figure was $255 million in NVST’s case. Assured Guaranty Ltd. (NYSE:AGO) is the most popular stock in this table. On the other hand China Biologic Products Holdings, Inc.(NASDAQ:CBPO) is the least popular one with only 14 bullish hedge fund positions. Envista Holdings Corporation (NYSE:NVST) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately NVST wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); NVST investors were disappointed as the stock returned 0.9% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.