Hedge Funds Done Buying Hologic, Inc. (HOLX)?

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Hologic, Inc. (NASDAQ:HOLX) based on those filings.

Hologic, Inc. (NASDAQ:HOLX) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 41 hedge funds’ portfolios at the end of March. At the end of this article we will also compare HOLX to other stocks including Wabtec Corporation (NYSE:WAB), Enel Americas S.A. (NYSE:ENIA), and NetApp Inc. (NASDAQ:NTAP) to get a better sense of its popularity.

Video: Watch our video about the top 5 most popular hedge fund stocks.

If you’d ask most stock holders, hedge funds are assumed to be unimportant, old financial vehicles of the past. While there are more than 8000 funds in operation at the moment, Our experts hone in on the top tier of this group, about 850 funds. These investment experts command bulk of all hedge funds’ total capital, and by keeping track of their best stock picks, Insider Monkey has uncovered a number of investment strategies that have historically outstripped the market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Andrew Sandler of Sandler Capital Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we are still not out of the woods in terms of the coronavirus pandemic. So, we checked out this successful trader’s “corona catalyst plays“. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to check out the key hedge fund action encompassing Hologic, Inc. (NASDAQ:HOLX).

What does smart money think about Hologic, Inc. (NASDAQ:HOLX)?

At Q1’s end, a total of 41 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from one quarter earlier. By comparison, 23 hedge funds held shares or bullish call options in HOLX a year ago. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

Among these funds, Glenview Capital held the most valuable stake in Hologic, Inc. (NASDAQ:HOLX), which was worth $137.3 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $106.4 million worth of shares. D E Shaw, Two Sigma Advisors, and GLG Partners 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 Endurant Capital Management allocated the biggest weight to Hologic, Inc. (NASDAQ:HOLX), around 7.53% of its 13F portfolio. Tamarack Capital Management is also relatively very bullish on the stock, designating 5.05 percent of its 13F equity portfolio to HOLX.

Since Hologic, Inc. (NASDAQ:HOLX) has faced bearish sentiment from hedge fund managers, it’s easy to see that there was a specific group of funds that decided to sell off their positions entirely by the end of the third quarter. At the top of the heap, Anand Parekh’s Alyeska Investment Group cut the largest investment of the “upper crust” of funds monitored by Insider Monkey, totaling an estimated $35.9 million in stock. Matthew L Pinz’s fund, Pinz Capital, also sold off its stock, about $2.3 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks similar to Hologic, Inc. (NASDAQ:HOLX). These stocks are Wabtec Corporation (NYSE:WAB), Enel Americas S.A. (NYSE:ENIA), NetApp Inc. (NASDAQ:NTAP), and Ubiquiti Inc. (NYSE:UI). This group of stocks’ market values are closest to HOLX’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.25 hedge funds with bullish positions and the average amount invested in these stocks was $501 million. That figure was $866 million in HOLX’s case. Wabtec Corporation (NYSE:WAB) is the most popular stock in this table. On the other hand Enel Americas S.A. (NYSE:ENIA) is the least popular one with only 7 bullish hedge fund positions. Hologic, Inc. (NASDAQ:HOLX) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 8.3% in 2020 through the end of May but still beat the market by 13.2 percentage points. Hedge funds were also right about betting on HOLX as the stock returned 51% in Q2 (through the end of May) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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