At Insider Monkey, we pore over the filings of nearly 867 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30th. In this article, we will use that wealth of knowledge to determine whether or not Steris Plc (NYSE:STE) makes for a good investment right now.
Steris Plc (NYSE:STE) shareholders have witnessed a decrease in support from the world’s most elite money managers of late. Steris Plc (NYSE:STE) was in 34 hedge funds’ portfolios at the end of September. The all time high for this statistic is 40. There were 35 hedge funds in our database with STE holdings at the end of June. Our calculations also showed that STE 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. Now let’s take a look at the recent hedge fund action encompassing Steris Plc (NYSE:STE).
Do Hedge Funds Think STE Is A Good Stock To Buy Now?
At Q3’s end, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in STE over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Steris Plc (NYSE:STE) was held by Generation Investment Management, which reported holding $637 million worth of stock at the end of September. It was followed by Select Equity Group with a $327 million position. Other investors bullish on the company included Echo Street Capital Management, Fisher Asset Management, and Polar Capital. In terms of the portfolio weights assigned to each position Diker Management allocated the biggest weight to Steris Plc (NYSE:STE), around 29.93% of its 13F portfolio. Generation Investment Management is also relatively very bullish on the stock, earmarking 2.65 percent of its 13F equity portfolio to STE.
Judging by the fact that Steris Plc (NYSE:STE) has witnessed declining sentiment from the aggregate hedge fund industry, logic holds that there lies a certain “tier” of hedgies that decided to sell off their positions entirely in the third quarter. At the top of the heap, Andrew Sandler’s Sandler Capital Management dumped the biggest position of all the hedgies monitored by Insider Monkey, valued at about $5.7 million in stock, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors was right behind this move, as the fund cut about $1 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest was cut by 1 funds in the third quarter.
Let’s now review hedge fund activity in other stocks similar to Steris Plc (NYSE:STE). We will take a look at The Cooper Companies, Inc. (NYSE:COO), Regions Financial Corporation (NYSE:RF), The Clorox Company (NYSE:CLX), Cenovus Energy Inc (NYSE:CVE), Church & Dwight Co., Inc. (NYSE:CHD), Expeditors International of Washington (NASDAQ:EXPD), and Teladoc Health, Inc (NYSE:TDOC). This group of stocks’ market caps are closest to STE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| COO | 37 | 1403322 | 4 |
| RF | 28 | 204669 | -5 |
| CLX | 34 | 971875 | -3 |
| CVE | 30 | 717847 | -2 |
| CHD | 20 | 1362889 | -15 |
| EXPD | 26 | 452843 | -3 |
| TDOC | 40 | 2836350 | -3 |
| Average | 30.7 | 1135685 | -3.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.7 hedge funds with bullish positions and the average amount invested in these stocks was $1136 million. That figure was $1733 million in STE’s case. Teladoc Health, Inc (NYSE:TDOC) is the most popular stock in this table. On the other hand Church & Dwight Co., Inc. (NYSE:CHD) is the least popular one with only 20 bullish hedge fund positions. Steris Plc (NYSE:STE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for STE is 64.5. 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. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on STE as the stock returned 7.2% since the end of Q3 (through 11/30) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Steris Plc (NYSE:STE)
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Disclosure: None. This article was originally published at Insider Monkey.
