Is TFX Stock A Buy?

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. Insider Monkey finished processing 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of December 31st, 2020. What do these smart investors think about Teleflex Incorporated (NYSE:TFX)?

Is TFX stock a buy? Hedge funds were taking a bearish view. The number of long hedge fund bets were cut by 10 lately. Teleflex Incorporated (NYSE:TFX) was in 30 hedge funds’ portfolios at the end of December. The all time high for this statistic is 40. Our calculations also showed that TFX isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Paul Marshall of Marshall Wace

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. With all of this in mind let’s take a glance at the recent hedge fund action regarding Teleflex Incorporated (NYSE:TFX).

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

At the end of December, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -25% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TFX over the last 22 quarters. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).

Among these funds, Marshall Wace LLP held the most valuable stake in Teleflex Incorporated (NYSE:TFX), which was worth $363.4 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $112.2 million worth of shares. Rock Springs Capital Management, Polar Capital, and Sectoral Asset 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 Codex Capital allocated the biggest weight to Teleflex Incorporated (NYSE:TFX), around 2.95% of its 13F portfolio. Sectoral Asset Management is also relatively very bullish on the stock, setting aside 2.5 percent of its 13F equity portfolio to TFX.

Judging by the fact that Teleflex Incorporated (NYSE:TFX) has experienced falling interest from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of fund managers that slashed their entire stakes in the fourth quarter. Intriguingly, D. E. Shaw’s D E Shaw said goodbye to the biggest investment of the 750 funds watched by Insider Monkey, comprising about $10.3 million in stock. Robert Joseph Caruso’s fund, Select Equity Group, also dropped its stock, about $9.9 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 10 funds in the fourth quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Teleflex Incorporated (NYSE:TFX) but similarly valued. We will take a look at Kansas City Southern (NYSE:KSU), Fortis Inc. (NYSE:FTS), Incyte Corporation (NASDAQ:INCY), Vipshop Holdings Limited (NYSE:VIPS), ORIX Corporation (NYSE:IX), Ingersoll Rand Inc. (NYSE:IR), and Qorvo Inc (NASDAQ:QRVO). This group of stocks’ market valuations are closest to TFX’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 30 hedge funds with bullish positions and the average amount invested in these stocks was $1244 million. That figure was $791 million in TFX’s case. Qorvo Inc (NASDAQ:QRVO) is the most popular stock in this table. On the other hand ORIX Corporation (NYSE:IX) is the least popular one with only 3 bullish hedge fund positions. Teleflex Incorporated (NYSE:TFX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for TFX is 45.6. 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 TFX wasn’t nearly as popular as these 30 stocks (hedge fund sentiment was quite bearish); TFX investors were disappointed as the stock returned 3.7% 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.