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 Vontier Corporation (NYSE:VNT).
Vontier Corporation (NYSE:VNT) has experienced a decrease in hedge fund interest recently. Vontier Corporation (NYSE:VNT) was in 34 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 38. Our calculations also showed that VNT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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Chuck Royce of Royce & Associates
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Do Hedge Funds Think VNT Is A Good Stock To Buy Now?
At the end of June, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from the first quarter of 2020. By comparison, 0 hedge funds held shares or bullish call options in VNT a year ago. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Gates Capital Management, managed by Jeffrey Gates, holds the number one position in Vontier Corporation (NYSE:VNT). Gates Capital Management has a $188.1 million position in the stock, comprising 5.4% of its 13F portfolio. The second most bullish fund manager is Laurion Capital Management, managed by Benjamin A. Smith, which holds a $133.6 million position; 0.7% of its 13F portfolio is allocated to the company. Other members of the smart money with similar optimism encompass Chuck Royce’s Royce & Associates, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Bill Miller’s Miller Value Partners. In terms of the portfolio weights assigned to each position DSAM Partners allocated the biggest weight to Vontier Corporation (NYSE:VNT), around 5.79% of its 13F portfolio. Gates Capital Management is also relatively very bullish on the stock, dishing out 5.42 percent of its 13F equity portfolio to VNT.
Due to the fact that Vontier Corporation (NYSE:VNT) has faced a decline in interest from the entirety of the hedge funds we track, we can see that there lies a certain “tier” of hedge funds that slashed their entire stakes heading into Q3. Interestingly, David Rosen’s Rubric Capital Management sold off the largest stake of the “upper crust” of funds followed by Insider Monkey, valued at an estimated $15 million in stock. Frank Fu’s fund, CaaS Capital, also sold off its stock, about $8.3 million worth. These moves are important to note, as aggregate hedge fund interest was cut by 4 funds heading into Q3.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Vontier Corporation (NYSE:VNT) but similarly valued. We will take a look at Helen of Troy Limited (NASDAQ:HELE), Surgery Partners, Inc. (NASDAQ:SGRY), Ollie’s Bargain Outlet Holdings Inc (NASDAQ:OLLI), TG Therapeutics Inc (NASDAQ:TGTX), ImmunityBio, Inc. (NASDAQ:IBRX), Synaptics Incorporated (NASDAQ:SYNA), and Teradata Corporation (NYSE:TDC). This group of stocks’ market caps resemble VNT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HELE | 17 | 182425 | -12 |
| SGRY | 11 | 87325 | 1 |
| OLLI | 21 | 110405 | -3 |
| TGTX | 28 | 553462 | 1 |
| IBRX | 7 | 8280 | 1 |
| SYNA | 27 | 551583 | 2 |
| TDC | 26 | 504981 | 0 |
| Average | 19.6 | 285494 | -1.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.6 hedge funds with bullish positions and the average amount invested in these stocks was $285 million. That figure was $927 million in VNT’s case. TG Therapeutics Inc (NASDAQ:TGTX) is the most popular stock in this table. On the other hand ImmunityBio, Inc. (NASDAQ:IBRX) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Vontier Corporation (NYSE:VNT) is more popular among hedge funds. Our overall hedge fund sentiment score for VNT is 77.8. 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. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Unfortunately VNT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on VNT were disappointed as the stock returned 0.1% since the end of the second quarter (through 10/11) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
