At Insider Monkey, we pore over the filings of nearly 873 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of June 30th. In this article, we will use that wealth of knowledge to determine whether or not Anthem Inc (NYSE:ANTM) makes for a good investment right now.
Is Anthem Inc (NYSE:ANTM) a healthy stock for your portfolio? Money managers were in a bullish mood. The number of long hedge fund bets moved up by 9 in recent months. Anthem Inc (NYSE:ANTM) was in 67 hedge funds’ portfolios at the end of June. The all time high for this statistic is 73. Our calculations also showed that ANTM 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.
Glenn Greenberg of Brave Warrior Capital
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. Now let’s take a glance at the recent hedge fund action encompassing Anthem Inc (NYSE:ANTM).
Do Hedge Funds Think ANTM Is A Good Stock To Buy Now?
At second quarter’s end, a total of 67 of the hedge funds tracked by Insider Monkey were long this stock, a change of 16% from one quarter earlier. On the other hand, there were a total of 69 hedge funds with a bullish position in ANTM a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Eagle Capital Management was the largest shareholder of Anthem Inc (NYSE:ANTM), with a stake worth $1002.5 million reported as of the end of June. Trailing Eagle Capital Management was Orbis Investment Management, which amassed a stake valued at $819.2 million. Brave Warrior Capital, AQR Capital Management, and Farallon Capital 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 Brave Warrior Capital allocated the biggest weight to Anthem Inc (NYSE:ANTM), around 15.01% of its 13F portfolio. MIC Capital Partners is also relatively very bullish on the stock, setting aside 6.16 percent of its 13F equity portfolio to ANTM.
As aggregate interest increased, some big names have been driving this bullishness. Harbor Spring Capital, managed by Amit Nitin Doshi, assembled the biggest position in Anthem Inc (NYSE:ANTM). Harbor Spring Capital had $26.3 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $9.5 million investment in the stock during the quarter. The other funds with new positions in the stock are McKinley Capital Management, Paul Tudor Jones’s Tudor Investment Corp, and Andrew Weiss’s Weiss Asset Management.
Let’s also examine hedge fund activity in other stocks similar to Anthem Inc (NYSE:ANTM). We will take a look at Lam Research Corporation (NASDAQ:LRCX), Airbnb, Inc. (NASDAQ:ABNB), British American Tobacco plc (NYSE:BTI), Infosys Limited (NYSE:INFY), Booking Holdings Inc. (NASDAQ:BKNG), PetroChina Company Limited (NYSE:PTR), and BP plc (NYSE:BP). This group of stocks’ market caps are similar to ANTM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LRCX | 58 | 3719258 | 4 |
| ABNB | 58 | 2711062 | 6 |
| BTI | 12 | 1011787 | -2 |
| INFY | 22 | 2158547 | -4 |
| BKNG | 100 | 6943746 | -3 |
| PTR | 8 | 85856 | 0 |
| BP | 30 | 1080625 | 1 |
| Average | 41.1 | 2530126 | 0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 41.1 hedge funds with bullish positions and the average amount invested in these stocks was $2530 million. That figure was $4838 million in ANTM’s case. Booking Holdings Inc. (NASDAQ:BKNG) is the most popular stock in this table. On the other hand PetroChina Company Limited (NYSE:PTR) is the least popular one with only 8 bullish hedge fund positions. Anthem Inc (NYSE:ANTM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ANTM is 69.6. 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 25.7% in 2021 through September 27th and beat the market again by 6.2 percentage points. Unfortunately ANTM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ANTM were disappointed as the stock returned 2.1% since the end of June (through 9/27) 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.
