As we already know from media reports and hedge fund investor letters, hedge funds delivered their best returns in a decade. Most investors who decided to stick with hedge funds after a rough 2018 recouped their losses by the end of the fourth quarter of 2019. A significant number of hedge funds continued their strong performance in 2020 and 2021 as well. We get to see hedge funds’ thoughts towards the market and individual stocks by aggregating their quarterly portfolio movements and reading their investor letters. In this article, we will particularly take a look at what hedge funds think about Healthequity Inc (NASDAQ:HQY).
Healthequity Inc (NASDAQ:HQY) has experienced an increase in enthusiasm from smart money lately. Healthequity Inc (NASDAQ:HQY) was in 26 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 24. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 20 hedge funds in our database with HQY positions at the end of the second quarter. Our calculations also showed that HQY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind let’s check out the key hedge fund action regarding Healthequity Inc (NASDAQ:HQY).
Donald Sussman of Paloma Partners
Do Hedge Funds Think HQY Is A Good Stock To Buy Now?
At the end of September, a total of 26 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 30% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HQY over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Healthequity Inc (NASDAQ:HQY) was held by Echo Street Capital Management, which reported holding $126.1 million worth of stock at the end of September. It was followed by Millennium Management with a $30.4 million position. Other investors bullish on the company included Greenhouse Funds, Motley Fool Asset Management, and Balyasny Asset Management. In terms of the portfolio weights assigned to each position Greenhouse Funds allocated the biggest weight to Healthequity Inc (NASDAQ:HQY), around 2.18% of its 13F portfolio. Sio Capital is also relatively very bullish on the stock, setting aside 1.52 percent of its 13F equity portfolio to HQY.
With a general bullishness amongst the heavyweights, key hedge funds have jumped into Healthequity Inc (NASDAQ:HQY) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, assembled the most outsized position in Healthequity Inc (NASDAQ:HQY). Balyasny Asset Management had $10.6 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also made a $8.3 million investment in the stock during the quarter. The other funds with brand new HQY positions are Paul Marshall and Ian Wace’s Marshall Wace LLP, Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management, and Donald Sussman’s Paloma Partners.
Let’s now review hedge fund activity in other stocks similar to Healthequity Inc (NASDAQ:HQY). We will take a look at Mister Car Wash Inc. (NYSE:MCW), International Game Technology PLC (NYSE:IGT), DoubleVerify Holdings, Inc. (NYSE:DV), HollyFrontier Corporation (NYSE:HFC), SLM Corp (NASDAQ:SLM), Element Solutions Inc. (NYSE:ESI), and Squarespace Inc. (NYSE:SQSP). This group of stocks’ market caps resemble HQY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MCW | 24 | 4229422 | -7 |
| IGT | 36 | 490976 | 4 |
| DV | 10 | 496623 | -6 |
| HFC | 24 | 411801 | -6 |
| SLM | 27 | 891503 | 0 |
| ESI | 28 | 649935 | 5 |
| SQSP | 11 | 93960 | -1 |
| Average | 22.9 | 1037746 | -1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.9 hedge funds with bullish positions and the average amount invested in these stocks was $1038 million. That figure was $264 million in HQY’s case. International Game Technology PLC (NYSE:IGT) is the most popular stock in this table. On the other hand DoubleVerify Holdings, Inc. (NYSE:DV) is the least popular one with only 10 bullish hedge fund positions. Healthequity Inc (NASDAQ:HQY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HQY is 70.8. 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. 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately HQY wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HQY were disappointed as the stock returned -35% since the end of September (through 12/9) 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.
Follow Healthequity Inc. (NASDAQ:HQY)
Follow Healthequity Inc. (NASDAQ:HQY)
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Disclosure: None. This article was originally published at Insider Monkey.
