Here is What Hedge Funds Think About Roper Technologies Inc. (ROP)

Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Roper Technologies Inc. (NYSE:ROP).

Roper Technologies Inc. (NYSE:ROP) has experienced an increase in enthusiasm from smart money of late. Roper Technologies Inc. (NYSE:ROP) was in 45 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 50. Our calculations also showed that ROP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Michael Gelband of ExodusPoint Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind let’s go over the key hedge fund action regarding Roper Technologies Inc. (NYSE:ROP).

Do Hedge Funds Think ROP Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 45 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from one quarter earlier. By comparison, 50 hedge funds held shares or bullish call options in ROP a year ago. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

The largest stake in Roper Technologies Inc. (NYSE:ROP) was held by Akre Capital Management, which reported holding $741.7 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $201.9 million position. Other investors bullish on the company included Echo Street Capital Management, D E Shaw, and Bristol Gate Capital Partners. In terms of the portfolio weights assigned to each position Lansing Management allocated the biggest weight to Roper Technologies Inc. (NYSE:ROP), around 11.82% of its 13F portfolio. Akre Capital Management is also relatively very bullish on the stock, earmarking 4.57 percent of its 13F equity portfolio to ROP.

Now, some big names have been driving this bullishness. Kingdon Capital, managed by Mark Kingdon, established the most outsized position in Roper Technologies Inc. (NYSE:ROP). Kingdon Capital had $9.2 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also initiated a $5.4 million position during the quarter. The other funds with brand new ROP positions are Alec Litowitz and Ross Laser’s Magnetar Capital, Ran Pang’s Quantamental Technologies, and Jinghua Yan’s TwinBeech Capital.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Roper Technologies Inc. (NYSE:ROP) but similarly valued. We will take a look at Monster Beverage Corp (NASDAQ:MNST), EOG Resources Inc (NYSE:EOG), Palo Alto Networks Inc (NYSE:PANW), IHS Markit Ltd. (NASDAQ:INFO), Global Payments Inc (NYSE:GPN), IQVIA Holdings, Inc. (NYSE:IQV), and Synopsys, Inc. (NASDAQ:SNPS). All of these stocks’ market caps are similar to ROP’s market cap.

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As you can see these stocks had an average of 57.6 hedge funds with bullish positions and the average amount invested in these stocks was $3621 million. That figure was $1667 million in ROP’s case. Palo Alto Networks Inc (NYSE:PANW) is the most popular stock in this table. On the other hand Monster Beverage Corp (NASDAQ:MNST) is the least popular one with only 42 bullish hedge fund positions. Roper Technologies Inc. (NYSE:ROP) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ROP is 40.8. 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 negative signal and 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 28.6% in 2021 through November 30th and surpassed the market again by 5.6 percentage points. Unfortunately ROP wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ROP investors were disappointed as the stock returned 4.2% since the end of September (through 11/30) 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 in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.

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