Before we spend days researching a stock idea we’d like to take a look at how hedge funds and billionaire investors recently traded that stock. S&P 500 Index ETF (SPY) lost 8.7% through October 26th. Forty percent of the S&P 500 constituents were down more than 10%. The average return of a randomly picked stock in the index is -9.5%. This means you (or a monkey throwing a dart) have less than an even chance of beating the market by randomly picking a stock. On the other hand, the top 25 most popular S&P 500 stocks among hedge funds had an average loss of 8.8%. In this article, we will take a look at what hedge funds think about Tivity Health, Inc. (NASDAQ:TVTY).
Tivity Health, Inc. (NASDAQ:TVTY) has experienced an increase in hedge fund interest of late. Our calculations also showed that TVTY isn’t among the 30 most popular stocks among hedge funds.
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. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a look at the latest hedge fund action regarding Tivity Health, Inc. (NASDAQ:TVTY).
What does the smart money think about Tivity Health, Inc. (NASDAQ:TVTY)?
At Q3’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 12% from the previous quarter. By comparison, 23 hedge funds held shares or bullish call options in TVTY heading into this year. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
More specifically, D E Shaw was the largest shareholder of Tivity Health, Inc. (NASDAQ:TVTY), with a stake worth $44.3 million reported as of the end of September. Trailing D E Shaw was GLG Partners, which amassed a stake valued at $31.1 million. PAR Capital Management, Endurant Capital Management, and Millennium Management were also very fond of the stock, giving the stock large weights in their portfolios.
As one would reasonably expect, some big names have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the biggest position in Tivity Health, Inc. (NASDAQ:TVTY). Marshall Wace LLP had $6.6 million invested in the company at the end of the quarter. Alec Litowitz and Ross Laser’s Magnetar Capital also made a $5.9 million investment in the stock during the quarter. The other funds with brand new TVTY positions are Jim Simons’s Renaissance Technologies, Brandon Haley’s Holocene Advisors, and Ken Griffin’s Citadel Investment Group.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Tivity Health, Inc. (NASDAQ:TVTY) but similarly valued. These stocks are Atrion Corporation (NASDAQ:ATRI), Eaton Vance Tax-Managed Global Buy-Write Opportunities Fund (NYSE:ETW), James River Group Holdings Ltd (NASDAQ:JRVR), and Multi-Color Corporation (NASDAQ:LABL). This group of stocks’ market caps are similar to TVTY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ATRI | 11 | 83569 | 0 |
| ETW | 1 | 30 | 1 |
| JRVR | 8 | 46526 | 1 |
| LABL | 5 | 11031 | 0 |
| Average | 6.25 | 35289 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.25 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $143 million in TVTY’s case. Atrion Corporation (NASDAQ:ATRI) is the most popular stock in this table. On the other hand 0 is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Tivity Health, Inc. (NASDAQ:TVTY) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None. This article was originally published at Insider Monkey.
