Hedge Funds Aren’t Crazy About Boston Scientific Corporation (BSX) Anymore

In this article we will check out the progression of hedge fund sentiment towards Boston Scientific Corporation (NYSE:BSX) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Boston Scientific Corporation (NYSE:BSX) shareholders have witnessed a decrease in support from the world’s most elite money managers in recent months. Boston Scientific Corporation (NYSE:BSX) was in 47 hedge funds’ portfolios at the end of September. The all time high for this statistic is 66. There were 51 hedge funds in our database with BSX holdings at the end of June. Our calculations also showed that BSX 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 we’re going to take a gander at the latest hedge fund action encompassing Boston Scientific Corporation (NYSE:BSX).

Andreas Halvorsen of Viking Global

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

At the end of September, a total of 47 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -8% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards BSX 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.

More specifically, Farallon Capital was the largest shareholder of Boston Scientific Corporation (NYSE:BSX), with a stake worth $607.6 million reported as of the end of September. Trailing Farallon Capital was Two Sigma Advisors, which amassed a stake valued at $350.7 million. Viking Global, OrbiMed Advisors, and Citadel Investment Group 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 Locust Wood Capital Advisers allocated the biggest weight to Boston Scientific Corporation (NYSE:BSX), around 3.68% of its 13F portfolio. Healthcor Management LP is also relatively very bullish on the stock, setting aside 3.2 percent of its 13F equity portfolio to BSX.

Due to the fact that Boston Scientific Corporation (NYSE:BSX) has faced falling interest from the smart money, logic holds that there were a few hedgies that elected to cut their entire stakes in the third quarter. At the top of the heap, Matthew Stadelman’s Diamond Hill Capital cut the largest position of the “upper crust” of funds watched by Insider Monkey, worth an estimated $46.9 million in stock. Michael Rockefeller and KarláKroeker’s fund, Woodline Partners, also cut its stock, about $44.9 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 4 funds in the third quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Boston Scientific Corporation (NYSE:BSX) but similarly valued. These stocks are Activision Blizzard, Inc. (NASDAQ:ATVI), Stellantis N.V. (NYSE:STLA), Ecolab Inc. (NYSE:ECL), Eaton Corporation plc (NYSE:ETN), Norfolk Southern Corp. (NYSE:NSC), Dominion Energy Inc. (NYSE:D), and America Movil SAB de CV (NYSE:AMX). This group of stocks’ market values match BSX’s market value.

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As you can see these stocks had an average of 38.9 hedge funds with bullish positions and the average amount invested in these stocks was $1553 million. That figure was $3051 million in BSX’s case. Activision Blizzard, Inc. (NASDAQ:ATVI) is the most popular stock in this table. On the other hand America Movil SAB de CV (NYSE:AMX) is the least popular one with only 11 bullish hedge fund positions. Boston Scientific Corporation (NYSE:BSX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BSX is 48.5. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately BSX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BSX were disappointed as the stock returned -12.3% since the end of September (through 11/30) 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.