You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make a proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
CVS Health Corp (NYSE:CVS) shareholders have witnessed an increase in the hedge fund interest of late. At the end of this article, we will also compare CVS Health Corp (NYSE:CVS) to other stocks, including Allergan, PLC. (NYSE:AGN), Altria Group Inc (NYSE:MO), and Amgen, Inc. (NASDAQ:AMGN) to get a better sense of its popularity.
Follow Cvs Health Corp (NYSE:CVS)
Follow Cvs Health Corp (NYSE:CVS)
At the moment there are tons of gauges stock traders put to use to size up their stock investments. Two of the less known gauges are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the best hedge fund managers can beat their index-focused peers by a superb margin (see the details here).
Keeping this in mind, we’re going to view the key action regarding CVS Health Corp (NYSE:CVS).
What does the smart money think about CVS Health Corp (NYSE:CVS)?
At the end of the third quarter, a total of 60 of the hedge funds tracked by Insider Monkey were bullish on this stock, an increase of 5% from the previous quarter. With hedge funds’ sentiment swirling, there exists a few notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, AQR Capital Management, managed by Cliff Asness, holds the largest position in CVS Health Corp (NYSE:CVS). AQR Capital Management has a $388.9 million position in the stock, comprising 0.8% of its 13F portfolio. On AQR Capital Management’s heels is Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, which holds a $208.2 million position; the fund has 1% of its 13F portfolio invested in the stock. Other peers that are bullish comprise Phill Gross and Robert Atchinson’s Adage Capital Management, Israel Englander’s Millennium Management, and Charles de Vaulx’s International Value Advisers.
Consequently, key hedge funds were leading the bulls’ herd. Renaissance Technologies created the largest position in CVS Health Corp (NYSE:CVS). Renaissance Technologies had $82.4 million invested in the company at the end of the quarter. Dan Sobol and Lisa Hess’ SkyTop Capital Management also made a $7.5 million investment in the stock during the quarter. The other funds with new positions in the stock are George Hall’s Clinton Group, John Overdeck and David Siegel’s Two Sigma Advisors, and Charles Clough’s Clough Capital Partners.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as CVS Health Corp (NYSE:CVS) but similarly valued. We will take a look at Allergan, PLC. (NYSE:AGN), Altria Group Inc (NYSE:MO), Amgen, Inc. (NASDAQ:AMGN), and British American Tobacco PLC (ADR) (NYSEMKT:BTI). This group of stocks’ market caps is similar to CVS Health Corp (NYSE:CVS)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AGN | 151 | 20469067 | 0 |
| MO | 41 | 1626592 | -2 |
| AMGN | 73 | 4466393 | 5 |
| BTI | 15 | 398589 | 1 |
As you can see, these stocks had an average of 70 hedge funds with bullish positions and the average amount invested in these stocks was $6.74 billion. That figure was $2.21 billion in CVS Health Corp (NYSE:CVS)’s case. Allergan, PLC. (NYSE:AGN) is the most popular stock in this table. On the other hand, British American Tobacco PLC (ADR) (NYSEMKT:BTI) is the least popular one with only 15 bullish hedge fund positions. CVS Health Corp (NYSE:CVS) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard Allergan, PLC. (NYSE:AGN) might be a better candidate to consider a long position.
