The market has been volatile due to elections and the potential of another Federal Reserve rate increase. Small cap stocks have been on a tear, as the Russell 2000 ETF (IWM) has outperformed the larger S&P 500 ETF (SPY) by more than 10 percentage points since the end of June. SEC filings and hedge fund investor letters indicate that the smart money seems to be getting back in stocks, and the funds’ movements is one of the reasons why small-cap stocks are red hot. In this article, we analyze what the smart money thinks of C.R. Bard, Inc. (NYSE:BCR) and find out how it is affected by hedge funds’ moves.
C.R. Bard, Inc. (NYSE:BCR) was in 32 hedge funds’ portfolios at the end of September. BCR shareholders have witnessed an increase in support from the world’s most successful money managers recently. There were 30 hedge funds in our database with BCR holdings at the end of June. At the end of this article we will also compare BCR to other stocks including Twitter Inc (NYSE:TWTR), The Clorox Company (NYSE:CLX), and Telecom Italia S.p.A. (ADR) (NYSE:TI) to get a better sense of its popularity.
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We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
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Hedge fund activity in C.R. Bard, Inc. (NYSE:BCR)
At the end of the third quarter, a total of 32 of the hedge funds tracked by Insider Monkey were long this stock, a rise of 7% from the previous quarter. On the other hand, there were a total of 27 hedge funds with a bullish position in BCR at the beginning of this year. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jim Simons’ Renaissance Technologies has the most valuable position in C.R. Bard, Inc. (NYSE:BCR), worth close to $178.8 million. The second most bullish fund manager is Citadel Investment Group, led by Ken Griffin, which holds a $178.6 million position. Other hedge funds and institutional investors that are bullish encompass Donald Yacktman’s Yacktman Asset Management, Cliff Asness’ AQR Capital Management and Dmitry Balyasny’s Balyasny Asset Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As one would reasonably expect, key hedge funds were breaking ground themselves. Point72 Asset Management, led by Steve Cohen, assembled the largest position in C.R. Bard, Inc. (NYSE:BCR). Point72 Asset Management had $51.4 million invested in the company at the end of the quarter. Arthur B Cohen and Joseph Healey’s Healthcor Management LP also initiated a $44.9 million position during the quarter. The other funds with brand new BCR positions are Paul Tudor Jones’s Tudor Investment Corp, and Israel Englander’s Millennium Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as C.R. Bard, Inc. (NYSE:BCR) but similarly valued. We will take a look at Twitter Inc (NYSE:TWTR), The Clorox Company (NYSE:CLX), Telecom Italia S.p.A. (ADR) (NYSE:TI), and Royal Caribbean Cruises Ltd. (NYSE:RCL). This group of stocks’ market valuations resemble BCR’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TWTR | 47 | 1080032 | 17 |
| CLX | 25 | 771295 | -1 |
| TI | 4 | 2469 | 4 |
| RCL | 26 | 821060 | -13 |
As you can see these stocks had an average of 25.5 hedge funds with bullish positions and the average amount invested in these stocks was $669 million. That figure was $1146 million in BCR’s case. Twitter Inc (NYSE:TWTR) is the most popular stock in this table. On the other hand Telecom Italia S.p.A. (ADR) (NYSE:TI) is the least popular one with only 4 bullish hedge fund positions. C.R. Bard, Inc. (NYSE:BCR) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TWTR might be a better candidate to consider taking a long position in.
Disclosure: None
