Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Allscripts Healthcare Solutions Inc (NASDAQ:MDRX).
Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) was in 23 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 31. MDRX shareholders have witnessed a decrease in support from the world’s most elite money managers lately. There were 24 hedge funds in our database with MDRX holdings at the end of March. Our calculations also showed that MDRX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Bruce Kovner of Caxton Associates LP
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a gander at the latest hedge fund action surrounding Allscripts Healthcare Solutions Inc (NASDAQ:MDRX).
Do Hedge Funds Think MDRX Is A Good Stock To Buy Now?
At Q2’s end, a total of 23 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -4% from the previous quarter. By comparison, 16 hedge funds held shares or bullish call options in MDRX a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Fisher Asset Management was the largest shareholder of Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), with a stake worth $105.4 million reported as of the end of June. Trailing Fisher Asset Management was D E Shaw, which amassed a stake valued at $82.1 million. Arrowstreet Capital, Renaissance Technologies, and Tamarack Capital Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Tamarack Capital Management allocated the biggest weight to Allscripts Healthcare Solutions Inc (NASDAQ:MDRX), around 2.36% of its 13F portfolio. Quantinno Capital is also relatively very bullish on the stock, dishing out 0.58 percent of its 13F equity portfolio to MDRX.
Seeing as Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) has faced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there is a sect of fund managers that slashed their positions entirely in the second quarter. Interestingly, Frank Fu’s CaaS Capital dumped the biggest position of all the hedgies watched by Insider Monkey, comprising an estimated $15.6 million in stock, and Greg Eisner’s Engineers Gate Manager was right behind this move, as the fund said goodbye to about $1.7 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds in the second quarter.
Let’s go over hedge fund activity in other stocks similar to Allscripts Healthcare Solutions Inc (NASDAQ:MDRX). These stocks are MYT Netherlands Parent B.V. (NYSE:MYTE), Cadence Bancorporation (NYSE:CADE), JELD-WEN Holding, Inc. (NYSE:JELD), First Interstate Bancsystem Inc (NASDAQ:FIBK), Mednax Inc. (NYSE:MD), Prestige Consumer Healthcare Inc. (NYSE:PBH), and Barnes Group Inc. (NYSE:B). This group of stocks’ market valuations resemble MDRX’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MYTE | 18 | 139088 | 0 |
| CADE | 25 | 161340 | -2 |
| JELD | 23 | 274466 | -4 |
| FIBK | 12 | 24090 | -2 |
| MD | 19 | 346888 | 8 |
| PBH | 13 | 108805 | -1 |
| B | 12 | 42332 | -6 |
| Average | 17.4 | 156716 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.4 hedge funds with bullish positions and the average amount invested in these stocks was $157 million. That figure was $296 million in MDRX’s case. Cadence Bancorporation (NYSE:CADE) is the most popular stock in this table. On the other hand First Interstate Bancsystem Inc (NASDAQ:FIBK) is the least popular one with only 12 bullish hedge fund positions. Allscripts Healthcare Solutions Inc (NASDAQ:MDRX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MDRX is 68.6. 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 positive signal but 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 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately MDRX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MDRX were disappointed as the stock returned -25.4% since the end of June (through 10/22) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
