We hate to say this but, we told you so. On February 27th we published an article with the title Recession is Imminent: We Need A Travel Ban NOW and predicted a US recession when the S&P 500 Index was trading at the 3150 level. We also told you to short the market and buy long-term Treasury bonds. Our article also called for a total international travel ban. While we were warning you, President Trump minimized the threat and failed to act promptly. As a result of his inaction, we will now experience a deeper recession (see why hell is coming).
In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. Keeping this in mind, let’s take a look at whether Haemonetics Corporation (NYSE:HAE) 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.
Is Haemonetics Corporation (NYSE:HAE) an outstanding investment today? Prominent investors are betting on the stock. The number of bullish hedge fund positions went up by 8 in recent months. Our calculations also showed that HAE isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings and see the video at the end of this article for Q3 rankings). HAE was in 33 hedge funds’ portfolios at the end of December. There were 25 hedge funds in our database with HAE holdings at the end of the previous quarter.
Today there are a multitude of tools stock market investors put to use to analyze stocks. Two of the less utilized tools are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the best picks of the top money managers can outpace their index-focused peers by a superb amount (see the details here).
Arthur B Cohen and Joseph Healey of Healthcor Management LP
We leave no stone unturned when looking for the next great investment idea. For example we recently identified a stock that trades 25% below the net cash on its balance sheet. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences, and go through short-term trade recommendations like this one. We even check out the recommendations of services with hard to believe track records. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now let’s analyze the new hedge fund action encompassing Haemonetics Corporation (NYSE:HAE).
How are hedge funds trading Haemonetics Corporation (NYSE:HAE)?
Heading into the first quarter of 2020, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 32% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HAE over the last 18 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Haemonetics Corporation (NYSE:HAE), with a stake worth $280.3 million reported as of the end of September. Trailing Renaissance Technologies was Healthcor Management LP, which amassed a stake valued at $61.9 million. Eminence Capital, Nitorum Capital, and Fisher Asset Management 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 Healthcor Management LP allocated the biggest weight to Haemonetics Corporation (NYSE:HAE), around 2.21% of its 13F portfolio. Parkman Healthcare Partners is also relatively very bullish on the stock, dishing out 2 percent of its 13F equity portfolio to HAE.
With a general bullishness amongst the heavyweights, key money managers have jumped into Haemonetics Corporation (NYSE:HAE) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, created the biggest position in Haemonetics Corporation (NYSE:HAE). Balyasny Asset Management had $20.1 million invested in the company at the end of the quarter. Brian Ashford-Russell and Tim Woolley’s Polar Capital also made a $19.5 million investment in the stock during the quarter. The other funds with brand new HAE positions are Greg Martinez’s Parkman Healthcare Partners, Michael Gelband’s ExodusPoint Capital, and Chuck Royce’s Royce & Associates.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Haemonetics Corporation (NYSE:HAE) but similarly valued. These stocks are Stericycle Inc (NASDAQ:SRCL), Quanta Services Inc (NYSE:PWR), Zynga Inc (NASDAQ:ZNGA), and Capri Holdings Limited (NYSE:CPRI). All of these stocks’ market caps are similar to HAE’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SRCL | 24 | 832122 | 4 |
| PWR | 44 | 958990 | 12 |
| ZNGA | 48 | 953368 | 8 |
| CPRI | 40 | 1033626 | -1 |
| Average | 39 | 944527 | 5.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 39 hedge funds with bullish positions and the average amount invested in these stocks was $945 million. That figure was $596 million in HAE’s case. Zynga Inc (NASDAQ:ZNGA) is the most popular stock in this table. On the other hand Stericycle Inc (NASDAQ:SRCL) is the least popular one with only 24 bullish hedge fund positions. Haemonetics Corporation (NYSE:HAE) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks lost 17.4% in 2020 through March 25th but still beat the market by 5.5 percentage points. A small number of hedge funds were also right about betting on HAE as the stock returned -14.6% during the same time period and outperformed the market by an even larger margin.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Disclosure: None. This article was originally published at Insider Monkey.
