The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2020. In this article we are going to take a look at smart money sentiment towards The Cooper Companies, Inc. (NYSE:COO).
Is COO stock a buy? The smart money was buying. The number of bullish hedge fund bets increased by 1 recently. The Cooper Companies, Inc. (NYSE:COO) was in 31 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 34. Our calculations also showed that COO isn’t among the 30 most popular stocks among hedge funds (click for Q4 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. 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 S&P 500 ETFs by 124 percentage points since March 2017 (see the details here).
David Blood of Generation Investment Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this biotech stock. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 website. Now we’re going to analyze the latest hedge fund action regarding The Cooper Companies, Inc. (NYSE:COO).
Do Hedge Funds Think COO Is A Good Stock To Buy Now?
At fourth quarter’s end, a total of 31 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from the third quarter of 2020. By comparison, 28 hedge funds held shares or bullish call options in COO 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.
The largest stake in The Cooper Companies, Inc. (NYSE:COO) was held by Generation Investment Management, which reported holding $814.8 million worth of stock at the end of December. It was followed by Healthcor Management LP with a $125.6 million position. Other investors bullish on the company included Balyasny Asset Management, Viking Global, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Healthcor Management LP allocated the biggest weight to The Cooper Companies, Inc. (NYSE:COO), around 4.84% of its 13F portfolio. Generation Investment Management is also relatively very bullish on the stock, designating 3.64 percent of its 13F equity portfolio to COO.
As aggregate interest increased, specific money managers were leading the bulls’ herd. Balyasny Asset Management, managed by Dmitry Balyasny, created the most valuable position in The Cooper Companies, Inc. (NYSE:COO). Balyasny Asset Management had $80.3 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $11.8 million investment in the stock during the quarter. The following funds were also among the new COO investors: Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Matthew Hulsizer’s PEAK6 Capital Management, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s go over hedge fund activity in other stocks similar to The Cooper Companies, Inc. (NYSE:COO). We will take a look at Conagra Brands, Inc. (NYSE:CAG), Broadridge Financial Solutions, Inc. (NYSE:BR), Martin Marietta Materials, Inc. (NYSE:MLM), NovoCure Limited (NASDAQ:NVCR), Tyler Technologies, Inc. (NYSE:TYL), Hartford Financial Services Group Inc (NYSE:HIG), and NICE Ltd (NASDAQ:NICE). This group of stocks’ market valuations match COO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CAG | 28 | 634446 | -7 |
| BR | 25 | 244137 | -8 |
| MLM | 41 | 2010592 | 3 |
| NVCR | 22 | 417787 | 0 |
| TYL | 32 | 592915 | 1 |
| HIG | 36 | 1559898 | 0 |
| NICE | 26 | 726097 | 0 |
| Average | 30 | 883696 | -1.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $884 million. That figure was $1349 million in COO’s case. Martin Marietta Materials, Inc. (NYSE:MLM) is the most popular stock in this table. On the other hand NovoCure Limited (NASDAQ:NVCR) is the least popular one with only 22 bullish hedge fund positions. The Cooper Companies, Inc. (NYSE:COO) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for COO is 57. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and beat the market again by 1.5 percentage points. Unfortunately COO wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on COO were disappointed as the stock returned 6.8% since the end of December (through 4/12) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Cooper Companies Inc. (NYSE:COO)
Follow Cooper Companies Inc. (NYSE:COO)
Disclosure: None. This article was originally published at Insider Monkey.
