Is ICLR Stock A Buy or Sell?

Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in ICON Public Limited Company (NASDAQ:ICLR)? The smart money sentiment can provide an answer to this question.

Is ICLR stock a buy? ICON Public Limited Company (NASDAQ:ICLR) has seen an increase in activity from the world’s largest hedge funds in recent months. ICON Public Limited Company (NASDAQ:ICLR) was in 29 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 27. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ICLR isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Matthew Hulsizer of PEAK6 Capital 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 psychedelic-drug startup. 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 take a look at the recent hedge fund action surrounding ICON Public Limited Company (NASDAQ:ICLR).

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

Heading into the first quarter of 2021, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 21% from the previous quarter. On the other hand, there were a total of 19 hedge funds with a bullish position in ICLR a year ago. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).

The largest stake in ICON Public Limited Company (NASDAQ:ICLR) was held by Renaissance Technologies, which reported holding $455.5 million worth of stock at the end of December. It was followed by Montanaro Asset Management with a $35.4 million position. Other investors bullish on the company included Partner Fund Management, D E Shaw, and McKinley Capital Management. In terms of the portfolio weights assigned to each position Montanaro Asset Management allocated the biggest weight to ICON Public Limited Company (NASDAQ:ICLR), around 5.97% of its 13F portfolio. Fundsmith Long/Short Fund is also relatively very bullish on the stock, dishing out 2.98 percent of its 13F equity portfolio to ICLR.

Now, some big names have jumped into ICON Public Limited Company (NASDAQ:ICLR) headfirst. Montanaro Asset Management, managed by Charles Montanaro, established the most outsized position in ICON Public Limited Company (NASDAQ:ICLR). Montanaro Asset Management had $35.4 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $7.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Terry Smith’s Fundsmith Long/Short Fund, Matthew Hulsizer’s PEAK6 Capital Management, and Michael Gelband’s ExodusPoint Capital.

Let’s also examine hedge fund activity in other stocks similar to ICON Public Limited Company (NASDAQ:ICLR). These stocks are China Eastern Airlines Corp. Ltd. (NYSE:CEA), The Toro Company (NYSE:TTC), Anaplan, Inc. (NYSE:PLAN), CBOE Global Markets Inc (NASDAQ:CBOE), Denali Therapeutics Inc. (NASDAQ:DNLI), Mohawk Industries, Inc. (NYSE:MHK), and Quanta Services Inc (NYSE:PWR). This group of stocks’ market valuations are similar to ICLR’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 32.1 hedge funds with bullish positions and the average amount invested in these stocks was $1020 million. That figure was $646 million in ICLR’s case. Anaplan, Inc. (NYSE:PLAN) is the most popular stock in this table. On the other hand China Eastern Airlines Corp. Ltd. (NYSE:CEA) is the least popular one with only 1 bullish hedge fund positions. ICON Public Limited Company (NASDAQ:ICLR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ICLR is 62.6. 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 negative signal and 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 surpassed the market again by 1.5 percentage points. Unfortunately ICLR wasn’t nearly as popular as these 30 stocks (hedge fund sentiment was quite bearish); ICLR investors were disappointed as the stock returned -0.5% 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 most of these stocks already outperformed the market in 2020.

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