Hedge Funds Are Buying AstraZeneca plc (AZN)

In this article we will take a look at whether hedge funds think AstraZeneca plc (NASDAQ:AZN) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

AstraZeneca plc (NASDAQ:AZN) was in 37 hedge funds’ portfolios at the end of June. The all time high for this statistic is 41. AZN has experienced an increase in hedge fund sentiment of late. There were 34 hedge funds in our database with AZN holdings at the end of March. Our calculations also showed that AZN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Philip Hempleman of Ardsley Partners

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. 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. 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. Now we’re going to take a gander at the latest hedge fund action encompassing AstraZeneca plc (NASDAQ:AZN).

Do Hedge Funds Think AZN Is A Good Stock To Buy Now?

Heading into the third quarter of 2021, a total of 37 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in AZN over the last 24 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in AstraZeneca plc (NASDAQ:AZN) was held by Fisher Asset Management, which reported holding $1127.9 million worth of stock at the end of June. It was followed by GQG Partners with a $995.9 million position. Other investors bullish on the company included Camber Capital Management, Point72 Asset Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Healthcare Value Capital allocated the biggest weight to AstraZeneca plc (NASDAQ:AZN), around 5.97% of its 13F portfolio. Sphera Global Healthcare Fund is also relatively very bullish on the stock, earmarking 4.65 percent of its 13F equity portfolio to AZN.

With a general bullishness amongst the heavyweights, specific money managers have been driving this bullishness. Camber Capital Management, managed by Stephen DuBois, created the most outsized call position in AstraZeneca plc (NASDAQ:AZN). Camber Capital Management had $119.8 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also made a $36.7 million investment in the stock during the quarter. The other funds with new positions in the stock are D. E. Shaw’s D E Shaw, Philip Hempleman’s Ardsley Partners, and Ray Dalio’s Bridgewater Associates.

Let’s also examine hedge fund activity in other stocks similar to AstraZeneca plc (NASDAQ:AZN). We will take a look at Philip Morris International Inc. (NYSE:PM), Royal Dutch Shell plc (NYSE:RDS), Unilever PLC (NYSE:UL), Honeywell International Inc. (NASDAQ:HON), Linde plc (NYSE:LIN), Bristol Myers Squibb Company (NYSE:BMY), and Charter Communications, Inc. (NASDAQ:CHTR). This group of stocks’ market values are similar to AZN’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 51.9 hedge funds with bullish positions and the average amount invested in these stocks was $5958 million. That figure was $2772 million in AZN’s case. Charter Communications, Inc. (NASDAQ:CHTR) is the most popular stock in this table. On the other hand Unilever PLC (NYSE:UL) is the least popular one with only 19 bullish hedge fund positions. AstraZeneca plc (NASDAQ:AZN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AZN is 51.1. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. A small number of hedge funds were also right about betting on AZN as the stock returned 2.3% since the end of the second quarter (through 10/11) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.