The Insider Monkey team has completed processing the quarterly 13F filings for the March quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Waters Corporation (NYSE:WAT).
Waters Corporation (NYSE:WAT) was in 34 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 38. WAT investors should be aware of an increase in enthusiasm from smart money in recent months. There were 30 hedge funds in our database with WAT positions at the end of the fourth quarter. Our calculations also showed that WAT isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Andrew Sandler of Sandler Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind let’s review the recent hedge fund action surrounding Waters Corporation (NYSE:WAT).
Do Hedge Funds Think WAT Is A Good Stock To Buy Now?
At the end of March, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the fourth quarter of 2020. On the other hand, there were a total of 25 hedge funds with a bullish position in WAT 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.
The largest stake in Waters Corporation (NYSE:WAT) was held by Fundsmith LLP, which reported holding $1248.5 million worth of stock at the end of December. It was followed by Impax Asset Management with a $211.9 million position. Other investors bullish on the company included Select Equity Group, Arrowstreet Capital, and D E Shaw. In terms of the portfolio weights assigned to each position Fundsmith LLP allocated the biggest weight to Waters Corporation (NYSE:WAT), around 3.97% of its 13F portfolio. Sivik Global Healthcare is also relatively very bullish on the stock, earmarking 2.23 percent of its 13F equity portfolio to WAT.
As industrywide interest jumped, key money managers have jumped into Waters Corporation (NYSE:WAT) headfirst. Point72 Asset Management, managed by Steve Cohen, created the biggest position in Waters Corporation (NYSE:WAT). Point72 Asset Management had $66.6 million invested in the company at the end of the quarter. Michael Rockefeller and KarláKroeker’s Woodline Partners also initiated a $28.8 million position during the quarter. The other funds with brand new WAT positions are Andrew Sandler’s Sandler Capital Management, Krishen Sud’s Sivik Global Healthcare, and Joel Greenblatt’s Gotham Asset Management.
Let’s check out hedge fund activity in other stocks similar to Waters Corporation (NYSE:WAT). These stocks are Essex Property Trust Inc (NYSE:ESS), Warner Music Group Corp. (NASDAQ:WMG), Logitech International SA (NASDAQ:LOGI), Extra Space Storage, Inc. (NYSE:EXR), CureVac N.V. (NASDAQ:CVAC), SK Telecom Co., Ltd. (NYSE:SKM), and Ulta Beauty, Inc. (NASDAQ:ULTA). This group of stocks’ market values resemble WAT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ESS | 30 | 196855 | 5 |
| WMG | 27 | 839309 | -2 |
| LOGI | 15 | 311298 | -6 |
| EXR | 28 | 185472 | -1 |
| CVAC | 9 | 36312 | 0 |
| SKM | 8 | 113876 | 4 |
| ULTA | 46 | 1438287 | 3 |
| Average | 23.3 | 445916 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.3 hedge funds with bullish positions and the average amount invested in these stocks was $446 million. That figure was $2332 million in WAT’s case. Ulta Beauty, Inc. (NASDAQ:ULTA) is the most popular stock in this table. On the other hand SK Telecom Co., Ltd. (NYSE:SKM) is the least popular one with only 8 bullish hedge fund positions. Waters Corporation (NYSE:WAT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for WAT is 70.1. 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. 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Hedge funds were also right about betting on WAT as the stock returned 18.9% since the end of Q1 (through 6/25) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
