Is ICON plc – Ordinary Shares (ICLR) A Good Stock To Buy?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on ICON plc – Ordinary Shares (NASDAQ:ICLR).

ICON plc – Ordinary Shares (NASDAQ:ICLR) was in 27 hedge funds’ portfolios at the end of the third quarter of 2015. ICLR has experienced an increase in hedge fund sentiment of late. There were 23 hedge funds in our database with ICLR holdings at the end of the previous quarter. At the end of this article we will also compare ICLR to other stocks including Core Laboratories N.V. (NYSE:CLB), Commerce Bancshares, Inc. (NASDAQ:CBSH), and Brookdale Senior Living, Inc. (NYSE:BKD) to get a better sense of its popularity.

In the 21st century investor’s toolkit there are tons of metrics market participants have at their disposal to grade their stock investments. A pair of the most innovative metrics are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the best hedge fund managers can beat their index-focused peers by a superb amount (see the details here).

Now, we’re going to take a gander at the new action surrounding ICON plc – Ordinary Shares (NASDAQ:ICLR).

What have hedge funds been doing with ICON plc – Ordinary Shares (NASDAQ:ICLR)?

At the end of the third quarter, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the previous quarter. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the biggest position in ICON plc – Ordinary Shares (NASDAQ:ICLR), worth close to $42.5 million, accounting for 0.2% of its total 13F portfolio. Sitting at the No. 2 spot is Polar Capital, led by Brian Ashford-Russell and Tim Woolley, holding an $38.4 million position; the fund has 0.8% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions contain Jim Simons’s Renaissance Technologies, Phill Gross and Robert Atchinson’s Adage Capital Management and James Dondero’s Highland Capital Management.

As aggregate interest increased, specific money managers were leading the bulls’ herd. PDT Partners, managed by Peter Muller, initiated the most outsized position in ICON plc – Ordinary Shares (NASDAQ:ICLR). PDT Partners had $10.1 million invested in the company at the end of the quarter. Richard Driehaus’ Driehaus Capital also made a $8.2 million investment in the stock during the quarter. The other funds with brand new ICLR positions are Israel Englander’s Millennium Management, Sahm Adrangi’s Kerrisdale Capital, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s go over hedge fund activity in other stocks similar to ICON plc – Ordinary Shares (NASDAQ:ICLR). These stocks are Core Laboratories N.V. (NYSE:CLB), Commerce Bancshares, Inc. (NASDAQ:CBSH), Brookdale Senior Living, Inc. (NYSE:BKD), and Ingram Micro Inc. (NYSE:IM). This group of stocks’ market valuations resemble ICLR’s market valuation.

As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $770 million. That figure was $224 million in ICLR’s case. Brookdale Senior Living, Inc. (NYSE:BKD) is the most popular stock in this table, while Commerce Bancshares, Inc. (NASDAQ:CBSH) is the least popular one with only 10 bullish hedge fund positions. ICON plc – Ordinary Shares (NASDAQ:ICLR) is not the least popular stock in this group, but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard BKD might be a better candidate to consider a long position.