Hedge Funds Are Buying Clarivate Plc (CLVT)

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on Clarivate Plc (NYSE:CLVT).

Is Clarivate Plc (NYSE:CLVT) an attractive stock to buy now? Investors who are in the know were taking an optimistic view. The number of long hedge fund bets rose by 15 recently. Clarivate Plc (NYSE:CLVT) was in 41 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 45. Our calculations also showed that CLVT isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Jeffrey Altman of Owl Creek Asset Management

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. With all of this in mind let’s take a gander at the new hedge fund action regarding Clarivate Plc (NYSE:CLVT).

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

At the end of June, a total of 41 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 58% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in CLVT over the last 24 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Leonard Green & Partners held the most valuable stake in Clarivate Plc (NYSE:CLVT), which was worth $3211.8 million at the end of the second quarter. On the second spot was Select Equity Group which amassed $1382.6 million worth of shares. 40 North Management, Two Creeks Capital Management, and Alyeska Investment Group 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 Leonard Green & Partners allocated the biggest weight to Clarivate Plc (NYSE:CLVT), around 25.62% of its 13F portfolio. ROAM Global Management is also relatively very bullish on the stock, dishing out 15.3 percent of its 13F equity portfolio to CLVT.

As industrywide interest jumped, some big names have jumped into Clarivate Plc (NYSE:CLVT) headfirst. Two Creeks Capital Management, managed by Ryan Pedlow, created the biggest position in Clarivate Plc (NYSE:CLVT). Two Creeks Capital Management had $57.1 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also initiated a $49.4 million position during the quarter. The other funds with brand new CLVT positions are Jeffrey Altman’s Owl Creek Asset Management, Rishi Renjen’s ROAM Global Management, and Frank Fu’s CaaS Capital.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Clarivate Plc (NYSE:CLVT) but similarly valued. These stocks are MarketAxess Holdings Inc. (NASDAQ:MKTX), Bio-Techne Corporation (NASDAQ:TECH), Pembina Pipeline Corp (NYSE:PBA), Conagra Brands, Inc. (NYSE:CAG), Avery Dennison Corporation (NYSE:AVY), Tata Motors Limited (NYSE:TTM), and Jacobs Engineering Group Inc. (NYSE:J). This group of stocks’ market caps resemble CLVT’s market cap.

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As you can see these stocks had an average of 24.4 hedge funds with bullish positions and the average amount invested in these stocks was $502 million. That figure was $5367 million in CLVT’s case. Avery Dennison Corporation (NYSE:AVY) is the most popular stock in this table. On the other hand Tata Motors Limited (NYSE:TTM) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Clarivate Plc (NYSE:CLVT) is more popular among hedge funds. Our overall hedge fund sentiment score for CLVT is 87.3. 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. Unfortunately CLVT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CLVT were disappointed as the stock returned -25% since the end of the second quarter (through 10/11) 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 most of these stocks already outperformed the market since 2019.

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