Like everyone else, elite investors make mistakes. Some of their top consensus picks, such as Amazon, Facebook and Alibaba, have not done well in Q4 of 2018 due to various reasons. Nevertheless, the data show elite investors’ consensus picks have done well on average over the long-term. The top 20 stocks among hedge funds beat the S&P 500 Index ETFs by nearly 10 percentage points during the first 11 months of 2019. Because their consensus picks have done well, we pay attention to what elite funds think before doing extensive research on a stock. In this article, we take a closer look at Teleflex Incorporated (NYSE:TFX) from the perspective of those elite funds.
Is Teleflex Incorporated (NYSE:TFX) a cheap stock to buy now? Money managers are buying. The number of bullish hedge fund bets improved by 1 recently. Our calculations also showed that TFX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). TFX was in 26 hedge funds’ portfolios at the end of September. There were 25 hedge funds in our database with TFX holdings at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most stock holders, hedge funds are viewed as slow, old financial tools of years past. While there are more than 8000 funds with their doors open at present, We hone in on the aristocrats of this group, approximately 750 funds. It is estimated that this group of investors control the lion’s share of the hedge fund industry’s total capital, and by tracking their unrivaled picks, Insider Monkey has determined many investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points annually 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 .
Lee Ainslie of Maverick Capital
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a peek at the recent hedge fund action surrounding Teleflex Incorporated (NYSE:TFX).
How have hedgies been trading Teleflex Incorporated (NYSE:TFX)?
At the end of the third quarter, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 4% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TFX over the last 17 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.
According to Insider Monkey’s hedge fund database, Paul Marshall and Ian Wace’s Marshall Wace has the number one position in Teleflex Incorporated (NYSE:TFX), worth close to $282.7 million, accounting for 2.2% of its total 13F portfolio. Sitting at the No. 2 spot is Robert Joseph Caruso of Select Equity Group, with a $220.4 million position; 1.5% of its 13F portfolio is allocated to the company. Other professional money managers with similar optimism encompass Anand Parekh’s Alyeska Investment Group, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management and Brian Ashford-Russell and Tim Woolley’s Polar Capital. In terms of the portfolio weights assigned to each position Marshall Wace allocated the biggest weight to Teleflex Incorporated (NYSE:TFX), around 2.22% of its portfolio. Rock Springs Capital Management is also relatively very bullish on the stock, dishing out 1.76 percent of its 13F equity portfolio to TFX.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Columbus Circle Investors, managed by Principal Global Investors, initiated the most outsized position in Teleflex Incorporated (NYSE:TFX). Columbus Circle Investors had $8.7 million invested in the company at the end of the quarter. David E. Shaw’s D E Shaw also initiated a $3.4 million position during the quarter. The other funds with brand new TFX positions are Israel Englander’s Millennium Management, Lee Ainslie’s Maverick Capital, and Alec Litowitz and Ross Laser’s Magnetar Capital.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Teleflex Incorporated (NYSE:TFX) but similarly valued. We will take a look at Maxim Integrated Products Inc. (NASDAQ:MXIM), Evergy, Inc. (NYSE:EVRG), Loews Corporation (NYSE:L), and Deutsche Bank Aktiengesellschaft (NYSE:DB). This group of stocks’ market caps resemble TFX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MXIM | 29 | 249444 | 1 |
| EVRG | 25 | 866687 | 0 |
| L | 25 | 224303 | 4 |
| DB | 12 | 983289 | 1 |
| Average | 22.75 | 580931 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.75 hedge funds with bullish positions and the average amount invested in these stocks was $581 million. That figure was $768 million in TFX’s case. Maxim Integrated Products Inc. (NASDAQ:MXIM) is the most popular stock in this table. On the other hand Deutsche Bank Aktiengesellschaft (NYSE:DB) is the least popular one with only 12 bullish hedge fund positions. Teleflex Incorporated (NYSE:TFX) 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. 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 TFX wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on TFX were disappointed as the stock returned 4.1% during the fourth quarter (through the end of November) 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 many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
