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 Tivity Health, Inc. (NASDAQ:TVTY)? The smart money sentiment can provide an answer to this question.
Is TVTY a good stock to buy now? Tivity Health, Inc. (NASDAQ:TVTY) investors should pay attention to an increase in activity from the world’s largest hedge funds of late. Tivity Health, Inc. (NASDAQ:TVTY) was in 17 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 24. There were 16 hedge funds in our database with TVTY holdings at the end of June. Our calculations also showed that TVTY isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are many formulas stock traders use to assess stocks. A couple of the most innovative formulas are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the elite hedge fund managers can trounce the market by a healthy amount (see the details here).
Bill Miller of Miller Value Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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. Keeping this in mind let’s view the latest hedge fund action encompassing Tivity Health, Inc. (NASDAQ:TVTY).
Do Hedge Funds Think TVTY Is A Good Stock To Buy Now?
At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards TVTY over the last 21 quarters. With hedge funds’ capital changing hands, there exists a few key hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
Among these funds, HG Vora Capital Management held the most valuable stake in Tivity Health, Inc. (NASDAQ:TVTY), which was worth $67.3 million at the end of the third quarter. On the second spot was Hudson Executive Capital which amassed $67.2 million worth of shares. Miller Value Partners, Dendur Capital, and Two Sigma Advisors 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 Dendur Capital allocated the biggest weight to Tivity Health, Inc. (NASDAQ:TVTY), around 9.56% of its 13F portfolio. Hudson Executive Capital is also relatively very bullish on the stock, earmarking 6.87 percent of its 13F equity portfolio to TVTY.
Now, key hedge funds have been driving this bullishness. Renaissance Technologies, founded by Jim Simons, created the most valuable position in Tivity Health, Inc. (NASDAQ:TVTY). Renaissance Technologies had $0.4 million invested in the company at the end of the quarter. Donald Sussman’s Paloma Partners also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is Michael Gelband’s ExodusPoint Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Tivity Health, Inc. (NASDAQ:TVTY) but similarly valued. These stocks are American Finance Trust, Inc. (NASDAQ:AFIN), Foundation Building Materials, Inc. (NYSE:FBM), SI-BONE, Inc. (NASDAQ:SIBN), Core Laboratories N.V. (NYSE:CLB), Inhibrx, Inc. (NASDAQ:INBX), TCR2 Therapeutics Inc. (NASDAQ:TCRR), and Brookfield Property REIT Inc. (NASDAQ:BPYU). All of these stocks’ market caps are closest to TVTY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AFIN | 11 | 8551 | 1 |
| FBM | 13 | 77199 | 4 |
| SIBN | 19 | 163493 | 3 |
| CLB | 16 | 113946 | -3 |
| INBX | 10 | 177132 | 10 |
| TCRR | 13 | 179036 | 5 |
| BPYU | 12 | 76324 | 0 |
| Average | 13.4 | 113669 | 2.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.4 hedge funds with bullish positions and the average amount invested in these stocks was $114 million. That figure was $233 million in TVTY’s case. SI-BONE, Inc. (NASDAQ:SIBN) is the most popular stock in this table. On the other hand Inhibrx, Inc. (NASDAQ:INBX) is the least popular one with only 10 bullish hedge fund positions. Tivity Health, Inc. (NASDAQ:TVTY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TVTY is 66.1. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on TVTY as the stock returned 28.1% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Tivity Health Inc. (NASDAQ:TVTY)
Follow Tivity Health Inc. (NASDAQ:TVTY)
Suggested Articles:
Disclosure: None. This article was originally published at Insider Monkey.
