After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of June 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Nuance Communications Inc. (NASDAQ:NUAN).
Is Nuance Communications Inc. (NASDAQ:NUAN) a healthy stock for your portfolio? Prominent investors were getting more bullish. The number of bullish hedge fund positions moved up by 15 in recent months. Nuance Communications Inc. (NASDAQ:NUAN) was in 72 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 60. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that NUAN isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Matthew Halbower of Pentwater Capital
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Do Hedge Funds Think NUAN Is A Good Stock To Buy Now?
At second quarter’s end, a total of 72 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 26% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards NUAN over the last 24 quarters. So, let’s see 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, Philippe Laffont’s Coatue Management has the most valuable position in Nuance Communications Inc. (NASDAQ:NUAN), worth close to $732.4 million, comprising 2.9% of its total 13F portfolio. On Coatue Management’s heels is Pentwater Capital Management, led by Matthew Halbower, holding a $665.8 million position; the fund has 5.5% of its 13F portfolio invested in the stock. Some other peers with similar optimism contain Israel Englander’s Millennium Management, D. E. Shaw’s D E Shaw and Dmitry Balyasny’s Balyasny Asset Management. In terms of the portfolio weights assigned to each position Sand Grove Capital Partners allocated the biggest weight to Nuance Communications Inc. (NASDAQ:NUAN), around 13% of its 13F portfolio. Litespeed Management is also relatively very bullish on the stock, earmarking 9.23 percent of its 13F equity portfolio to NUAN.
As aggregate interest increased, key hedge funds were breaking ground themselves. Pentwater Capital Management, managed by Matthew Halbower, created the largest position in Nuance Communications Inc. (NASDAQ:NUAN). Pentwater Capital Management had $665.8 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $252.4 million investment in the stock during the quarter. The following funds were also among the new NUAN investors: Simon Sadler’s Segantii Capital, Sander Gerber’s Hudson Bay Capital Management, and Robert Emil Zoellner’s Alpine Associates.
Let’s now take a look at hedge fund activity in other stocks similar to Nuance Communications Inc. (NASDAQ:NUAN). We will take a look at IDEX Corporation (NYSE:IEX), Entegris Inc (NASDAQ:ENTG), VICI Properties Inc. (NYSE:VICI), Dynatrace, Inc. (NYSE:DT), Cardinal Health, Inc. (NYSE:CAH), PTC Inc (NASDAQ:PTC), and Carlyle Group Inc (NASDAQ:CG). This group of stocks’ market valuations match NUAN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| IEX | 22 | 945302 | 3 |
| ENTG | 25 | 1389606 | 2 |
| VICI | 37 | 664684 | -4 |
| DT | 50 | 1949953 | -2 |
| CAH | 40 | 897223 | 1 |
| PTC | 31 | 1958876 | -2 |
| CG | 21 | 601725 | -5 |
| Average | 32.3 | 1201053 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.3 hedge funds with bullish positions and the average amount invested in these stocks was $1201 million. That figure was $5576 million in NUAN’s case. Dynatrace, Inc. (NYSE:DT) is the most popular stock in this table. On the other hand Carlyle Group Inc (NASDAQ:CG) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Nuance Communications Inc. (NASDAQ:NUAN) is more popular among hedge funds. Our overall hedge fund sentiment score for NUAN is 90. 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. 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 24.1% in 2021 through September 20th and still beat the market by 6.9 percentage points. Unfortunately NUAN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NUAN were disappointed as the stock returned 1.4% since the end of the second quarter (through 9/20) 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 most of these stocks already outperformed the market since 2019.
Follow Nuance Communications Inc. (NASDAQ:NUAN)
Follow Nuance Communications Inc. (NASDAQ:NUAN)
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Disclosure: None. This article was originally published at Insider Monkey.
