Is HOLX Stock A Buy or Sell?

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 Hologic, Inc. (NASDAQ:HOLX).

Is HOLX stock a buy or sell? Hologic, Inc. (NASDAQ:HOLX) shareholders have witnessed a decrease in hedge fund interest in recent months. Hologic, Inc. (NASDAQ:HOLX) was in 43 hedge funds’ portfolios at the end of December. The all time high for this statistic is 50. Our calculations also showed that HOLX isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

David Siegel of Two Sigma Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy 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. Keeping this in mind we’re going to take a look at the new hedge fund action encompassing Hologic, Inc. (NASDAQ:HOLX).

Do Hedge Funds Think HOLX Is A Good Stock To Buy Now?

At Q4’s end, a total of 43 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HOLX over the last 22 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, D E Shaw, managed by D. E. Shaw, holds the number one position in Hologic, Inc. (NASDAQ:HOLX). D E Shaw has a $112.3 million position in the stock, comprising 0.1% of its 13F portfolio. Coming in second is Arthur B Cohen and Joseph Healey of Healthcor Management LP, with a $74.1 million position; 2.9% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include John Overdeck and David Siegel’s Two Sigma Advisors, Larry Robbins’s Glenview Capital and Brandon Haley’s Holocene Advisors. In terms of the portfolio weights assigned to each position Tamarack Capital Management allocated the biggest weight to Hologic, Inc. (NASDAQ:HOLX), around 4.16% of its 13F portfolio. Healthcor Management LP is also relatively very bullish on the stock, setting aside 2.86 percent of its 13F equity portfolio to HOLX.

Because Hologic, Inc. (NASDAQ:HOLX) has experienced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of money managers that slashed their entire stakes heading into Q1. Interestingly, Steve Cohen’s Point72 Asset Management dropped the largest investment of the 750 funds watched by Insider Monkey, comprising about $51.8 million in stock, and James E. Flynn’s Deerfield Management was right behind this move, as the fund cut about $25.8 million worth. These moves are interesting, as total hedge fund interest dropped by 7 funds heading into Q1.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Hologic, Inc. (NASDAQ:HOLX) but similarly valued. These stocks are PagSeguro Digital Ltd. (NYSE:PAGS), Check Point Software Technologies Ltd. (NASDAQ:CHKP), SS&C Technologies Holdings, Inc. (NASDAQ:SSNC), Restaurant Brands International Inc (NYSE:QSR), Smith & Nephew plc (NYSE:SNN), Amcor plc (NYSE:AMCR), and Ventas, Inc. (NYSE:VTR). This group of stocks’ market valuations are similar to HOLX’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.9 hedge funds with bullish positions and the average amount invested in these stocks was $1159 million. That figure was $716 million in HOLX’s case. SS&C Technologies Holdings, Inc. (NASDAQ:SSNC) is the most popular stock in this table. On the other hand Smith & Nephew plc (NYSE:SNN) is the least popular one with only 12 bullish hedge fund positions. Hologic, Inc. (NASDAQ:HOLX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HOLX is 65.7. 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 5.3% in 2021 through March 19th and beat the market again by 0.8 percentage points. Unfortunately HOLX wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on HOLX were disappointed as the stock returned -1.1% since the end of December (through 3/19) 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.

Disclosure: None. This article was originally published at Insider Monkey.

Follow Insider Monkey on Twitter