Hedge Funds Are Nibbling On Envista Holdings Corporation (NVST)

After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Envista Holdings Corporation (NYSE:NVST).

Is Envista Holdings Corporation (NYSE:NVST) a bargain? The smart money was becoming hopeful. The number of bullish hedge fund bets moved up by 1 lately. Envista Holdings Corporation (NYSE:NVST) was in 34 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 42. Our calculations also showed that NVST isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Louis Bacon Moore of Moore Capital

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 battery 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 key hedge fund action surrounding Envista Holdings Corporation (NYSE:NVST).

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

At first quarter’s end, a total of 34 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 3% from the fourth quarter of 2020. By comparison, 22 hedge funds held shares or bullish call options in NVST 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.

According to Insider Monkey’s hedge fund database, John W. Rogers’s Ariel Investments has the largest position in Envista Holdings Corporation (NYSE:NVST), worth close to $273.8 million, amounting to 2.7% of its total 13F portfolio. The second most bullish fund manager is David Paradice of Paradice Investment Management, with a $98.9 million position; 4.8% of its 13F portfolio is allocated to the company. Some other members of the smart money with similar optimism include Ken Griffin’s Citadel Investment Group, Israel Englander’s Millennium Management and Arthur B Cohen and Joseph Healey’s Healthcor Management LP. In terms of the portfolio weights assigned to each position Paradice Investment Management allocated the biggest weight to Envista Holdings Corporation (NYSE:NVST), around 4.75% of its 13F portfolio. Iron Triangle Partners is also relatively very bullish on the stock, designating 4.72 percent of its 13F equity portfolio to NVST.

As one would reasonably expect, some big names were breaking ground themselves. Moore Global Investments, managed by Louis Bacon, initiated the biggest position in Envista Holdings Corporation (NYSE:NVST). Moore Global Investments had $13.8 million invested in the company at the end of the quarter. John Overdeck and David Siegel’s Two Sigma Advisors also made a $10.2 million investment in the stock during the quarter. The other funds with brand new NVST positions are Andrew Sandler’s Sandler Capital Management, Lee Ainslie’s Maverick Capital, and Qing Li’s Sciencast Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Envista Holdings Corporation (NYSE:NVST) but similarly valued. These stocks are Woori Financial Group Inc. (NYSE:WF), MicroStrategy Incorporated (NASDAQ:MSTR), The AZEK Company Inc. (NYSE:AZEK), Wyndham Hotels & Resorts, Inc. (NYSE:WH), ANGI Homeservices Inc (NASDAQ:ANGI), Littelfuse, Inc. (NASDAQ:LFUS), and Penske Automotive Group, Inc. (NYSE:PAG). This group of stocks’ market values match NVST’s market value.

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As you can see these stocks had an average of 20.4 hedge funds with bullish positions and the average amount invested in these stocks was $311 million. That figure was $889 million in NVST’s case. ANGI Homeservices Inc (NASDAQ:ANGI) is the most popular stock in this table. On the other hand Woori Financial Group Inc. (NYSE:WF) is the least popular one with only 2 bullish hedge fund positions. Envista Holdings Corporation (NYSE:NVST) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NVST is 78.8. 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Hedge funds were also right about betting on NVST, though not to the same extent, as the stock returned 7.6% since Q1 (through June 25th) and outperformed the market as well.

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

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