You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make a proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Is Thermo Fisher Scientific Inc. (NYSE:TMO) worth your attention right now? Hedge funds are getting less optimistic. The number of long hedge fund bets shrunk by 14 lately. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Baidu.com, Inc. (ADR) (NASDAQ:BIDU), Regeneron Pharmaceuticals Inc (NASDAQ:REGN), and The TJX Companies, Inc. (NYSE:TJX) to gather more data points.
Follow Thermo Fisher Scientific Inc. (NYSE:TMO)
Follow Thermo Fisher Scientific Inc. (NYSE:TMO)
If you’d ask most market participants, hedge funds are assumed to be worthless, old financial tools of the past. While there are over an 8000 funds with their doors open today, Our researchers hone in on the elite of this club, approximately 700 funds. It is estimated that this group of investors orchestrate the lion’s share of all hedge funds’ total asset base, and by tracking their finest equity investments, Insider Monkey has determined a few investment strategies that have historically defeated the market. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per annum for a decade in their back tests.
With all of this in mind, let’s view the recent action surrounding Thermo Fisher Scientific Inc. (NYSE:TMO).
How are hedge funds trading Thermo Fisher Scientific Inc. (NYSE:TMO)?
At the Q3’s end, a total of 52 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -21% from the second quarter. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, Glenview Capital, managed by Larry Robbins, holds the largest position in Thermo Fisher Scientific Inc. (NYSE:TMO). Glenview Capital has a $1.0408 billion position in the stock, comprising 5.2% of its 13F portfolio. On Glenview Capital’s heels is Eagle Capital Management, managed by Boykin Curry, which holds a $538.2 million position; 2.4% of its 13F portfolio is allocated to the company. Remaining hedge funds and institutional investors that hold long positions contain Robert Rodriguez and Steven Romick’s First Pacific Advisors LLC and Robert Joseph Caruso’s Select Equity Group.
Because Thermo Fisher Scientific Inc. (NYSE:TMO) has faced declining sentiment from the smart money, logic holds that there is a sect of hedgies that decided to sell off their positions entirely last quarter. Intriguingly, Daniel S. Och’s OZ Management said goodbye to the largest position of the 700 funds followed by Insider Monkey, totaling an estimated $97.4 million in stock, and Andreas Halvorsen’s Viking Global was right behind this move, as the fund said goodbye to about $26.9 million worth of shares. These moves are important to note, as aggregate hedge fund interest was cut by 14 funds last quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Thermo Fisher Scientific Inc. (NYSE:TMO) but similarly valued. These stocks are Baidu.com, Inc. (ADR) (NASDAQ:BIDU), Regeneron Pharmaceuticals Inc (NASDAQ:REGN), The TJX Companies, Inc. (NYSE:TJX), and Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA). This group of stocks’ market caps are closest to TMO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BIDU | 52 | 3401399 | -18 |
| REGN | 32 | 1053183 | 3 |
| TJX | 37 | 1501811 | 4 |
| TEVA | 70 | 6803084 | -7 |
As you can see these stocks had an average of 48 hedge funds with bullish positions and the average amount invested in these stocks was $3.19 billion. That figure was $3.83 billion in TMO’s case. Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) is the most popular stock in this table and Regeneron Pharmaceuticals Inc (NASDAQ:REGN) is the least popular one with only 32 bullish hedge fund positions. Thermo Fisher Scientific Inc. (NYSE:TMO) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard TEVA might be a better candidate to consider a long position.
