Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Bausch Health Companies (NYSE:BHC) based on that data.
Is Bausch Health Companies (NYSE:BHC) going to take off soon? Money managers were taking an optimistic view. The number of bullish hedge fund bets moved up by 3 recently. Bausch Health Companies (NYSE:BHC) was in 45 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 43. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BHC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 42 hedge funds in our database with BHC positions at the end of the first quarter.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Larry Robbins of Glenview Capital
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Do Hedge Funds Think BHC Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 45 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from the previous quarter. On the other hand, there were a total of 35 hedge funds with a bullish position in BHC 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, Carl Icahn’s Icahn Capital LP has the largest position in Bausch Health Companies (NYSE:BHC), worth close to $1.0001 billion, corresponding to 4.1% of its total 13F portfolio. Sitting at the No. 2 spot is Paulson & Co, managed by John Paulson, which holds a $757.6 million position; 18.1% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions contain Jeffrey Ubben’s ValueAct Capital, Larry Robbins’s Glenview Capital and Steven Tananbaum’s GoldenTree Asset Management. In terms of the portfolio weights assigned to each position Chou Associates Management allocated the biggest weight to Bausch Health Companies (NYSE:BHC), around 19.17% of its 13F portfolio. Paulson & Co is also relatively very bullish on the stock, setting aside 18.1 percent of its 13F equity portfolio to BHC.
Now, specific money managers have been driving this bullishness. Fir Tree, managed by Jeffrey Tannenbaum, created the biggest position in Bausch Health Companies (NYSE:BHC). Fir Tree had $45.6 million invested in the company at the end of the quarter. Leon Cooperman’s Omega Advisors also initiated a $20.2 million position during the quarter. The other funds with new positions in the stock are Francis Chou’s Chou Associates Management, Simon Sadler’s Segantii Capital, and Himanshu Gulati’s Antara Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Bausch Health Companies (NYSE:BHC) but similarly valued. These stocks are Universal Display Corporation (NASDAQ:OLED), Lithia Motors Inc (NYSE:LAD), Henry Schein, Inc. (NASDAQ:HSIC), GFL Environmental Inc. (NYSE:GFL), Paylocity Holding Corp (NASDAQ:PCTY), Ares Management Corp (NYSE:ARES), and Kirkland Lake Gold Ltd. (NYSE:KL). This group of stocks’ market values resemble BHC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OLED | 23 | 105427 | 6 |
| LAD | 63 | 2924134 | 23 |
| HSIC | 39 | 1387222 | 7 |
| GFL | 23 | 670524 | 1 |
| PCTY | 19 | 507279 | -3 |
| ARES | 20 | 686208 | 4 |
| KL | 22 | 391037 | -3 |
| Average | 29.9 | 953119 | 5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.9 hedge funds with bullish positions and the average amount invested in these stocks was $953 million. That figure was $3997 million in BHC’s case. Lithia Motors Inc (NYSE:LAD) is the most popular stock in this table. On the other hand Paylocity Holding Corp (NASDAQ:PCTY) is the least popular one with only 19 bullish hedge fund positions. Bausch Health Companies (NYSE:BHC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BHC is 67.5. 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 22.9% in 2021 through October 1st and beat the market again by 5.6 percentage points. Unfortunately BHC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BHC were disappointed as the stock returned -2.5% since the end of June (through 10/1) 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 Bausch Health Companies Inc. (NYSE:BHC)
Follow Bausch Health Companies Inc. (NYSE:BHC)
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Disclosure: None. This article was originally published at Insider Monkey.
