After several tireless days we have finished crunching the numbers from nearly 750 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 December 31. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Tivity Health, Inc. (NASDAQ:TVTY).
Tivity Health, Inc. (NASDAQ:TVTY) was in 21 hedge funds’ portfolios at the end of December. TVTY shareholders have witnessed an increase in hedge fund sentiment lately. There were 19 hedge funds in our database with TVTY holdings at the end of the previous quarter. Our calculations also showed that TVTY isn’t among the 30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We’re going to take a look at the latest hedge fund action encompassing Tivity Health, Inc. (NASDAQ:TVTY).
What does the smart money think about Tivity Health, Inc. (NASDAQ:TVTY)?
At Q4’s end, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TVTY over the last 14 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, D E Shaw, managed by D. E. Shaw, holds the most valuable position in Tivity Health, Inc. (NASDAQ:TVTY). D E Shaw has a $39.8 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Millennium Management, led by Israel Englander, holding a $21.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other peers with similar optimism comprise Ken Griffin’s Citadel Investment Group, Noam Gottesman’s GLG Partners and Steve Cohen’s Point72 Asset Management.
As one would reasonably expect, some big names were leading the bulls’ herd. Point72 Asset Management, managed by Steve Cohen, established the largest position in Tivity Health, Inc. (NASDAQ:TVTY). Point72 Asset Management had $13 million invested in the company at the end of the quarter. Wayne Cooperman’s Cobalt Capital Management also made a $1.5 million investment in the stock during the quarter. The following funds were also among the new TVTY investors: Paul Tudor Jones’s Tudor Investment Corp, Andrew Feldstein and Stephen Siderow’s Blue Mountain Capital, and Minhua Zhang’s Weld Capital Management.
Let’s go over hedge fund activity in other stocks similar to Tivity Health, Inc. (NASDAQ:TVTY). We will take a look at Lakeland Financial Corporation (NASDAQ:LKFN), Denny’s Corporation (NASDAQ:DENN), Radware Ltd. (NASDAQ:RDWR), and Pacific Drilling SA (NYSE:PACD). This group of stocks’ market valuations resemble TVTY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LKFN | 11 | 19872 | -1 |
| DENN | 19 | 163526 | -3 |
| RDWR | 18 | 301130 | 2 |
| PACD | 6 | 710151 | 6 |
| Average | 13.5 | 298670 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $299 million. That figure was $130 million in TVTY’s case. Denny’s Corporation (NASDAQ:DENN) is the most popular stock in this table. On the other hand Pacific Drilling SA (NYSE:PACD) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Tivity Health, Inc. (NASDAQ:TVTY) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately TVTY wasn’t nearly as popular as these 15 stock and hedge funds that were betting on TVTY were disappointed as the stock returned -17.7% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
