A market surge in the first quarter, spurred by easing global macroeconomic concerns and Powell’s pivot ended up having a positive impact on the markets and many hedge funds as a result. The stocks of smaller companies which were especially hard hit during the fourth quarter slightly outperformed the market during the first quarter. Unfortunately, Trump is unpredictable and volatility returned in the second quarter and smaller-cap stocks went back to selling off. We finished compiling the latest 13F filings to get an idea about what hedge funds are thinking about the overall market as well as individual stocks. In this article we will study the hedge fund sentiment to see how those concerns affected their ownership of Boston Scientific Corporation (NYSE:BSX) during the quarter.
Is Boston Scientific Corporation (NYSE:BSX) a buy here? Investors who are in the know are getting more optimistic. The number of long hedge fund positions inched up by 1 lately. Our calculations also showed that bsx isn’t among the 30 most popular stocks among hedge funds.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to check out the latest hedge fund action surrounding Boston Scientific Corporation (NYSE:BSX).
Hedge fund activity in Boston Scientific Corporation (NYSE:BSX)
Heading into the second quarter of 2019, a total of 47 of the hedge funds tracked by Insider Monkey were long this stock, a change of 2% from the previous quarter. On the other hand, there were a total of 40 hedge funds with a bullish position in BSX a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Samuel Isaly’s OrbiMed Advisors has the number one position in Boston Scientific Corporation (NYSE:BSX), worth close to $222.2 million, accounting for 3.4% of its total 13F portfolio. The second most bullish fund manager is Senator Investment Group, managed by Doug Silverman and Alexander Klabin, which holds a $191.9 million position; the fund has 4.3% of its 13F portfolio invested in the stock. Other members of the smart money that hold long positions contain Dan Loeb’s Third Point, Israel Englander’s Millennium Management and Paul Marshall and Ian Wace’s Marshall Wace LLP.
As aggregate interest increased, key money managers have been driving this bullishness. Third Point, managed by Dan Loeb, created the most valuable position in Boston Scientific Corporation (NYSE:BSX). Third Point had $191.9 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also initiated a $84.1 million position during the quarter. The following funds were also among the new BSX investors: Dmitry Balyasny’s Balyasny Asset Management, Mark Kingdon’s Kingdon Capital, and Israel Englander’s Millennium Management.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Boston Scientific Corporation (NYSE:BSX) but similarly valued. We will take a look at Sony Corporation (NYSE:SNE), Crown Castle International Corp. (REIT) (NYSE:CCI), General Motors Company (NYSE:GM), and Prudential plc (NYSE:PUK). All of these stocks’ market caps resemble BSX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SNE | 22 | 569371 | -3 |
| CCI | 35 | 2190500 | 1 |
| GM | 53 | 5393147 | -7 |
| PUK | 6 | 34465 | -3 |
| Average | 29 | 2046871 | -3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29 hedge funds with bullish positions and the average amount invested in these stocks was $2047 million. That figure was $2099 million in BSX’s case. General Motors Company (NYSE:GM) is the most popular stock in this table. On the other hand Prudential plc (NYSE:PUK) is the least popular one with only 6 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 calculations showed that top 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Hedge funds were also right about betting on BSX, though not to the same extent, as the stock returned 0.2% during the same time frame and outperformed the market as well.
Disclosure: None. This article was originally published at Insider Monkey.
