The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 887 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article we look at what those investors think of Medtronic plc (NYSE:MDT).
Is Medtronic (MDT) stock a buy or sell? The smart money was in a bearish mood. The number of bullish hedge fund bets decreased by 3 in recent months. Medtronic plc (NYSE:MDT) was in 59 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 66. Our calculations also showed that MDT isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).
Ken Fisher of Fisher Asset Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. Recently Oregon became the first state to legalize psychedelic mushrooms which are shown to have promising results in treating depression, addiction, and PTSD in early stage academic studies. So, we are checking out this psychedelic drug stock idea right now. We go through lists like the 10 best biotech stocks to invest in to pick the next stock 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 (or at the end of this article). With all of this in mind we’re going to take a gander at the latest hedge fund action surrounding Medtronic plc (NYSE:MDT).
Do Hedge Funds Think MDT Is A Good Stock To Buy Now?
At the end of December, a total of 59 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the third quarter of 2020. The graph below displays the number of hedge funds with bullish position in MDT over the last 22 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Diamond Hill Capital held the most valuable stake in Medtronic plc (NYSE:MDT), which was worth $448.3 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $330.5 million worth of shares. D E Shaw, Fisher Asset Management, 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 Tri Locum Partners allocated the biggest weight to Medtronic plc (NYSE:MDT), around 8.68% of its 13F portfolio. Antipodes Partners is also relatively very bullish on the stock, dishing out 6.33 percent of its 13F equity portfolio to MDT.
Because Medtronic plc (NYSE:MDT) has witnessed declining sentiment from the aggregate hedge fund industry, we can see that there were a few hedgies that slashed their entire stakes last quarter. Intriguingly, John Murphy’s Levin Easterly Partners cut the biggest position of the 750 funds watched by Insider Monkey, valued at about $42.1 million in stock, and Justin John Ferayorni’s Tamarack Capital Management was right behind this move, as the fund sold off about $26 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest fell by 3 funds last quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Medtronic plc (NYSE:MDT) but similarly valued. We will take a look at SAP SE (NYSE:SAP), NextEra Energy, Inc. (NYSE:NEE), Texas Instruments Incorporated (NASDAQ:TXN), Honeywell International Inc. (NYSE:HON), United Parcel Service, Inc. (NYSE:UPS), Union Pacific Corporation (NYSE:UNP), and Bristol Myers Squibb Company (NYSE:BMY). This group of stocks’ market caps are similar to MDT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SAP | 14 | 1390775 | -2 |
| NEE | 61 | 3078288 | -3 |
| TXN | 56 | 2497473 | 1 |
| HON | 45 | 983560 | 4 |
| UPS | 48 | 1253721 | -9 |
| UNP | 68 | 3539131 | -6 |
| BMY | 131 | 6088294 | 7 |
| Average | 60.4 | 2690177 | -1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 60.4 hedge funds with bullish positions and the average amount invested in these stocks was $2690 million. That figure was $2815 million in MDT’s case. Bristol Myers Squibb Company (NYSE:BMY) is the most popular stock in this table. On the other hand SAP SE (NYSE:SAP) is the least popular one with only 14 bullish hedge fund positions. Medtronic plc (NYSE:MDT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MDT is 48. 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 5.3% in 2021 through March 19th and surpassed the market again by 0.8 percentage points. Unfortunately MDT wasn’t nearly as popular as these 30 stocks (hedge fund sentiment was quite bearish); MDT investors were disappointed as the stock returned -0.4% 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 most of these stocks already outperformed the market in 2020.
Follow Medtronic Inc (Old Filings) (NYSE:MDT)
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Disclosure: None. This article was originally published at Insider Monkey.
