The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 873 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 30th holdings, data that is available nowhere else. Should you consider Viatris Inc. (NASDAQ:VTRS) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Viatris Inc. (NASDAQ:VTRS) investors should be aware of a decrease in hedge fund sentiment of late. Viatris Inc. (NASDAQ:VTRS) was in 53 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 74. There were 58 hedge funds in our database with VTRS positions at the end of the first quarter. Our calculations also showed that VTRS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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.
James E. Flynn of Deerfield Management
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. With all of this in mind we’re going to take a look at the new hedge fund action surrounding Viatris Inc. (NASDAQ:VTRS).
Do Hedge Funds Think VTRS Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 53 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from one quarter earlier. On the other hand, there were a total of 46 hedge funds with a bullish position in VTRS a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Laurion Capital Management was the largest shareholder of Viatris Inc. (NASDAQ:VTRS), with a stake worth $469.1 million reported as of the end of June. Trailing Laurion Capital Management was Deerfield Management, which amassed a stake valued at $269 million. Camber Capital Management, Slate Path Capital, and Iridian Asset Management 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 Slate Path Capital allocated the biggest weight to Viatris Inc. (NASDAQ:VTRS), around 9.45% of its 13F portfolio. Camber Capital Management is also relatively very bullish on the stock, setting aside 5.78 percent of its 13F equity portfolio to VTRS.
Judging by the fact that Viatris Inc. (NASDAQ:VTRS) has experienced bearish sentiment from the smart money, it’s easy to see that there lies a certain “tier” of fund managers that elected to cut their full holdings in the second quarter. At the top of the heap, Richard S. Pzena’s Pzena Investment Management dropped the biggest investment of the 750 funds tracked by Insider Monkey, worth an estimated $160.2 million in stock. Peter Rathjens, Bruce Clarke and John Campbell’s fund, Arrowstreet Capital, also said goodbye to its stock, about $52.5 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 5 funds in the second quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Viatris Inc. (NASDAQ:VTRS) but similarly valued. These stocks are J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), Omnicom Group Inc. (NYSE:OMC), Principal Financial Group Inc (NASDAQ:PFG), Huazhu Group Limited (NASDAQ:HTHT), Zendesk Inc (NYSE:ZEN), Bill.com Holdings, Inc. (NYSE:BILL), and CMS Energy Corporation (NYSE:CMS). This group of stocks’ market caps are similar to VTRS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JBHT | 26 | 347997 | 4 |
| OMC | 30 | 668602 | -3 |
| PFG | 18 | 217118 | -13 |
| HTHT | 27 | 657115 | 0 |
| ZEN | 52 | 1851946 | 7 |
| BILL | 53 | 2766914 | 2 |
| CMS | 31 | 693813 | 3 |
| Average | 33.9 | 1029072 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.9 hedge funds with bullish positions and the average amount invested in these stocks was $1029 million. That figure was $1532 million in VTRS’s case. Bill.com Holdings, Inc. (NYSE:BILL) is the most popular stock in this table. On the other hand Principal Financial Group Inc (NASDAQ:PFG) is the least popular one with only 18 bullish hedge fund positions. Viatris Inc. (NASDAQ:VTRS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VTRS is 71.5. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 22.9% in 2021 through October 1st and beat the market again by 5.6 percentage points. Unfortunately VTRS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on VTRS were disappointed as the stock returned -4.1% since the end of June (through 10/1) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
