Is Hill-Rom Holdings, Inc. (HRC) Going to Burn These Hedge Funds?

The government requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings discloses the funds’ positions on September 30. We at Insider Monkey have made an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Hill-Rom Holdings, Inc. (NYSE:HRC) based on those filings.

Is Hill-Rom Holdings, Inc. (NYSE:HRC) a marvelous investment today? The best stock pickers are taking a bearish view. The number of long hedge fund positions fell by 1 in recent months. HRC was in 21 hedge funds’ portfolios at the end of the third quarter of 2015. There were 22 hedge funds in our database with HRC holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Boardwalk Pipeline Partners, LP (NYSE:BWP), Cedar Fair, L.P. (NYSE:FUN), and Cobalt International Energy, Inc. (NYSE:CIE) to gather more data points.

If you’d ask most shareholders, hedge funds are assumed to be worthless, outdated investment tools of yesteryear. While there are greater than an 8000 funds with their doors open today, Our experts hone in on the crème de la crème of this group, about 700 funds. These investment experts manage most of the smart money’s total capital, and by following their first-class investments, Insider Monkey has unearthed a few investment strategies that have historically outrun the broader indices. Insider Monkey’s small-cap hedge fund strategy outpaced the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Keeping this in mind, we’re going to take a gander at the fresh action surrounding Hill-Rom Holdings, Inc. (NYSE:HRC).

How are hedge funds trading Hill-Rom Holdings, Inc. (NYSE:HRC)?

At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Fisher’s Fisher Asset Management has the number one position in Hill-Rom Holdings, Inc. (NYSE:HRC), worth close to $82.9 million, comprising 0.2% of its total 13F portfolio. On Fisher Asset Management’s heels is Alyeska Investment Group, managed by Anand Parekh, which holds a $63 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Some other peers that are bullish contain Ken Griffin’s Citadel Investment Group, Jim Simons’ Renaissance Technologies and Chuck Royce’s Royce & Associates.

Because Hill-Rom Holdings, Inc. (NYSE:HRC) has faced bearish sentiment from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of fund managers that decided to sell off their positions entirely in the third quarter. At the top of the heap, Steve Cohen’s Point72 Asset Management said goodbye to the largest position of all the hedgies tracked by Insider Monkey, totaling an estimated $6.7 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund sold off about $4 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 1 funds in the third quarter.

Let’s also examine hedge fund activity in other stocks similar to Hill-Rom Holdings, Inc. (NYSE:HRC). These stocks are Boardwalk Pipeline Partners, LP (NYSE:BWP), Cedar Fair, L.P. (NYSE:FUN), Cobalt International Energy, Inc. (NYSE:CIE), and Curtiss-Wright Corp. (NYSE:CW). This group of stocks’ market caps are similar to HRC’s market cap.

As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $371 million. That figure was $340 million in HRC’s case. Cobalt International Energy, Inc. (NYSE:CIE) is the most popular stock in this table. On the other hand Cedar Fair, L.P. (NYSE:FUN) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Hill-Rom Holdings, Inc. (NYSE:HRC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.