At Insider Monkey, we pore over the filings of nearly 867 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30th. In this article, we will use that wealth of knowledge to determine whether or not Avantor, Inc. (NYSE:AVTR) makes for a good investment right now.
Is Avantor, Inc. (NYSE:AVTR) a safe investment today? The smart money was becoming hopeful. The number of bullish hedge fund positions went up by 9 recently. Avantor, Inc. (NYSE:AVTR) was in 53 hedge funds’ portfolios at the end of September. The all time high for this statistic is 56. Our calculations also showed that AVTR 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. Now we’re going to view the recent hedge fund action regarding Avantor, Inc. (NYSE:AVTR).
Dan Loeb of Third Point
Do Hedge Funds Think AVTR Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 53 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards AVTR over the last 25 quarters. So, let’s see 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, Third Point, managed by Dan Loeb, holds the biggest position in Avantor, Inc. (NYSE:AVTR). Third Point has a $441.7 million position in the stock, comprising 2.4% of its 13F portfolio. The second largest stake is held by Palestra Capital Management, led by Andrew Immerman and Jeremy Schiffman, holding a $319.3 million position; 6.8% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that hold long positions encompass Andreas Halvorsen’s Viking Global, Farallon Capital and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Highline Capital Management allocated the biggest weight to Avantor, Inc. (NYSE:AVTR), around 11.02% of its 13F portfolio. Palestra Capital Management is also relatively very bullish on the stock, setting aside 6.78 percent of its 13F equity portfolio to AVTR.
Consequently, key money managers have been driving this bullishness. Eminence Capital, managed by Ricky Sandler, established the most valuable position in Avantor, Inc. (NYSE:AVTR). Eminence Capital had $35.4 million invested in the company at the end of the quarter. Joseph Samuels’s Islet Management also made a $11.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Jay Genzer’s Thames Capital Management, and William Hyatt’s Hudson Way Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Avantor, Inc. (NYSE:AVTR) but similarly valued. These stocks are Ryanair Holdings plc (NASDAQ:RYAAY), Franco-Nevada Corporation (NYSE:FNV), AmerisourceBergen Corporation (NYSE:ABC), Cheniere Energy, Inc. (NYSE:LNG), Horizon Therapeutics Public Limited Company (NASDAQ:HZNP), Expedia Group Inc (NASDAQ:EXPE), and Sirius XM Holdings Inc (NASDAQ:SIRI). This group of stocks’ market values are similar to AVTR’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RYAAY | 15 | 411390 | 0 |
| FNV | 26 | 951083 | 3 |
| ABC | 44 | 1214780 | 1 |
| LNG | 49 | 3103167 | 0 |
| HZNP | 60 | 4573780 | 4 |
| EXPE | 78 | 6470916 | -9 |
| SIRI | 27 | 470025 | 1 |
| Average | 42.7 | 2456449 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 42.7 hedge funds with bullish positions and the average amount invested in these stocks was $2456 million. That figure was $2440 million in AVTR’s case. Expedia Group Inc (NASDAQ:EXPE) is the most popular stock in this table. On the other hand Ryanair Holdings plc (NASDAQ:RYAAY) is the least popular one with only 15 bullish hedge fund positions. Avantor, Inc. (NYSE:AVTR) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AVTR is 68.6. 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 AVTR wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on AVTR were disappointed as the stock returned -3.5% 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.
Follow Avantor Inc. (NYSE:AVTR)
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Disclosure: None. This article was originally published at Insider Monkey.
