Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about IQVIA Holdings, Inc. (NYSE:IQV).
Is IQVIA Holdings, Inc. (NYSE:IQV) a buy, sell, or hold? Investors who are in the know were betting on the stock. The number of long hedge fund bets improved by 7 lately. IQVIA Holdings, Inc. (NYSE:IQV) was in 69 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 69. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that IQV isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 62 hedge funds in our database with IQV holdings at the end of March.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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 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. Keeping this in mind let’s take a look at the key hedge fund action encompassing IQVIA Holdings, Inc. (NYSE:IQV).
Do Hedge Funds Think IQV Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 69 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from the first quarter of 2020. On the other hand, there were a total of 66 hedge funds with a bullish position in IQV a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in IQVIA Holdings, Inc. (NYSE:IQV) was held by Farallon Capital, which reported holding $694.7 million worth of stock at the end of June. It was followed by Arrowstreet Capital with a $304.1 million position. Other investors bullish on the company included Impax Asset Management, Third Point, and Steadfast Capital Management. In terms of the portfolio weights assigned to each position RIT Capital Partners allocated the biggest weight to IQVIA Holdings, Inc. (NYSE:IQV), around 19.53% of its 13F portfolio. Cowbird Capital is also relatively very bullish on the stock, designating 9.42 percent of its 13F equity portfolio to IQV.
As aggregate interest increased, key hedge funds have jumped into IQVIA Holdings, Inc. (NYSE:IQV) headfirst. Atalan Capital, managed by David Thomas, established the biggest position in IQVIA Holdings, Inc. (NYSE:IQV). Atalan Capital had $60.6 million invested in the company at the end of the quarter. Renaissance Technologies also made a $55.9 million investment in the stock during the quarter. The other funds with brand new IQV positions are Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management, Dmitry Balyasny’s Balyasny Asset Management, and Peter Muller’s PDT Partners.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as IQVIA Holdings, Inc. (NYSE:IQV) but similarly valued. These stocks are Walgreens Boots Alliance Inc (NASDAQ:WBA), National Grid plc (NYSE:NGG), Koninklijke Philips NV (NYSE:PHG), Lloyds Banking Group PLC (NYSE:LYG), Kimberly Clark Corporation (NYSE:KMB), Constellation Brands, Inc. (NYSE:STZ), and T. Rowe Price Group, Inc. (NASDAQ:TROW). This group of stocks’ market valuations match IQV’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WBA | 41 | 1113117 | 0 |
| NGG | 7 | 352045 | -2 |
| PHG | 10 | 122622 | -1 |
| LYG | 8 | 16299 | 3 |
| KMB | 37 | 903375 | 6 |
| STZ | 50 | 1607881 | -8 |
| TROW | 24 | 407032 | -2 |
| Average | 25.3 | 646053 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.3 hedge funds with bullish positions and the average amount invested in these stocks was $646 million. That figure was $3809 million in IQV’s case. Constellation Brands, Inc. (NYSE:STZ) is the most popular stock in this table. On the other hand National Grid plc (NYSE:NGG) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks IQVIA Holdings, Inc. (NYSE:IQV) is more popular among hedge funds. Our overall hedge fund sentiment score for IQV is 90. 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 25.7% in 2021 through September 27th and still beat the market by 6.2 percentage points. Unfortunately IQV wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on IQV were disappointed as the stock returned 2.4% since the end of the second quarter (through 9/27) 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.
