Here is What Hedge Funds Think About Danaher Corporation (DHR)

You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.

In this article, we will discuss the hedge fund interest towards Danaher Corporation (NYSE:DHR). Overall, there were no changes in the number of investors bullish on the stock. This is usually a negative indicator. However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Costco Wholesale Corporation (NASDAQ:COST), BHP Billiton plc (ADR) (NYSE:BBL), and Simon Property Group, Inc (NYSE:SPG) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

ndoeljindoel/Shutterstock.com

With all of this in mind, let’s take a gander at the recent action surrounding Danaher Corporation (NYSE:DHR).

What does the smart money think about Danaher Corporation (NYSE:DHR)?

As mentioned previously, the hedge funds sentiment towards Danaher Corporation remained unchanged at 54 during the third quarter. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Dan Loeb’s Third Point has the largest position in Danaher Corporation (NYSE:DHR), worth close to $352.8 million, comprising 3.1% of its total 13F portfolio. The second largest stake is held by Robert Joseph Caruso of Select Equity Group, with a $252.7 million position; 2.2% of its 13F portfolio is allocated to the stock. Other professional money managers that hold long positions include Eric W. Mandelblatt’s Soroban Capital Partners, John Griffin’s Blue Ridge Capital and Charles Akre’s Akre Capital Management.

On the other hand, some investors decided to unload their entire stakes in Danaher Corporation between July and September. For example, First Eagle Investment Management dropped the largest investment of the “upper crust” of funds followed by Insider Monkey, totaling close to $234.8 million in stock. John Smith Clark’s fund, Southpoint Capital Advisors, also closed its position, worth about $126.3 million. These bearish behaviors are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s check out hedge fund activity in other stocks similar to Danaher Corporation (NYSE:DHR). We will take a look at Costco Wholesale Corporation (NASDAQ:COST), BHP Billiton plc (ADR) (NYSE:BBL), Simon Property Group, Inc (NYSE:SPG), and Colgate-Palmolive Company (NYSE:CL). This group of stocks’ market valuations are similar to DHR’s market valuation.

As you can see these stocks had an average of 32 funds holding shares and the average amount invested in these stocks was $1.37 billion. That figure was $1.99 billion in Danaher Corporation’s case. Costco Wholesale Corporation (NASDAQ:COST) is the most popular stock in this table. On the other hand BHP Billiton plc (ADR) (NYSE:BBL) is the least popular one with only 18 bullish hedge fund positions. Compared to these stocks Danaher Corporation (NYSE:DHR) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.