The Insider Monkey team has completed processing the quarterly 13F filings for the June quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Humana Inc (NYSE:HUM).
Humana Inc (NYSE:HUM) investors should be aware of an increase in activity from the world’s largest hedge funds of late. Humana Inc (NYSE:HUM) was in 59 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 75. There were 53 hedge funds in our database with HUM positions at the end of the first quarter. Our calculations also showed that HUM isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In today’s marketplace there are a large number of formulas shareholders can use to assess their holdings. Two of the best formulas are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the best investment managers can trounce the broader indices by a significant amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website .
Ole Andreas Halvorsen of Viking Global
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. With all of this in mind let’s go over the key hedge fund action surrounding Humana Inc (NYSE:HUM).
Do Hedge Funds Think HUM Is A Good Stock To Buy Now?
At Q2’s end, a total of 59 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from the previous quarter. On the other hand, there were a total of 73 hedge funds with a bullish position in HUM a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
More specifically, GQG Partners was the largest shareholder of Humana Inc (NYSE:HUM), with a stake worth $537.7 million reported as of the end of June. Trailing GQG Partners was Diamond Hill Capital, which amassed a stake valued at $503.5 million. Citadel Investment Group, Viking Global, and AQR 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 Iron Triangle Partners allocated the biggest weight to Humana Inc (NYSE:HUM), around 8.28% of its 13F portfolio. BloombergSen is also relatively very bullish on the stock, setting aside 6.37 percent of its 13F equity portfolio to HUM.
As aggregate interest increased, key money managers have been driving this bullishness. Viking Global, managed by Andreas Halvorsen, created the biggest position in Humana Inc (NYSE:HUM). Viking Global had $260.4 million invested in the company at the end of the quarter. Kevin Molloy’s Iron Triangle Partners also made a $80.4 million investment in the stock during the quarter. The other funds with brand new HUM positions are Anand Parekh’s Alyeska Investment Group, Zach Schreiber’s Point State Capital, and Kevin Parker’s Sustainable Insight Capital Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Humana Inc (NYSE:HUM) but similarly valued. These stocks are KE Holdings Inc (NYSE:BEKE), CrowdStrike Holdings, Inc. (NASDAQ:CRWD), NXP Semiconductors NV (NASDAQ:NXPI), Honda Motor Co Ltd (NYSE:HMC), Global Payments Inc (NYSE:GPN), Twitter Inc (NYSE:TWTR), and Banco Bradesco SA (NYSE:BBD). This group of stocks’ market caps are similar to HUM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BEKE | 31 | 2712876 | -2 |
| CRWD | 66 | 7266652 | -11 |
| NXPI | 52 | 1336949 | -1 |
| HMC | 10 | 374945 | -2 |
| GPN | 66 | 4858185 | 4 |
| TWTR | 89 | 6031488 | -18 |
| BBD | 18 | 362308 | -1 |
| Average | 47.4 | 3277629 | -4.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 47.4 hedge funds with bullish positions and the average amount invested in these stocks was $3278 million. That figure was $3257 million in HUM’s case. Twitter Inc (NYSE:TWTR) is the most popular stock in this table. On the other hand Honda Motor Co Ltd (NYSE:HMC) is the least popular one with only 10 bullish hedge fund positions. Humana Inc (NYSE:HUM) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HUM is 64.6. 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 HUM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HUM were disappointed as the stock returned -9.4% 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.
Follow Humana Inc (NYSE:HUM)
Follow Humana Inc (NYSE:HUM)
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Disclosure: None. This article was originally published at Insider Monkey.
