The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of September 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Varex Imaging Corporation (NASDAQ:VREX).
Is VREX a good stock to buy now? Varex Imaging Corporation (NASDAQ:VREX) investors should pay attention to an increase in hedge fund interest lately. Varex Imaging Corporation (NASDAQ:VREX) was in 21 hedge funds’ portfolios at the end of September. The all time high for this statistic is 22. Our calculations also showed that VREX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Richard S. Pzena of Pzena Investment Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla 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. With all of this in mind we’re going to check out the recent hedge fund action encompassing Varex Imaging Corporation (NASDAQ:VREX).
Do Hedge Funds Think VREX Is A Good Stock To Buy Now?
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 31% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in VREX over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Pzena Investment Management held the most valuable stake in Varex Imaging Corporation (NASDAQ:VREX), which was worth $34.6 million at the end of the third quarter. On the second spot was Sessa Capital which amassed $34.3 million worth of shares. Millennium Management, Royce & Associates, and Clearline Capital 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 Sessa Capital allocated the biggest weight to Varex Imaging Corporation (NASDAQ:VREX), around 1.68% of its 13F portfolio. Rutabaga Capital Management is also relatively very bullish on the stock, designating 1.6 percent of its 13F equity portfolio to VREX.
Now, key hedge funds have been driving this bullishness. Renaissance Technologies, initiated the largest position in Varex Imaging Corporation (NASDAQ:VREX). Renaissance Technologies had $1.2 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $0.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Michael Gelband’s ExodusPoint Capital, David Harding’s Winton Capital Management, and Peter Algert’s Algert Global.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Varex Imaging Corporation (NASDAQ:VREX) but similarly valued. We will take a look at Hawaiian Holdings, Inc. (NASDAQ:HA), Central Securities Corporation (NYSE:CET), The Children’s Place Inc. (NASDAQ:PLCE), AMTD International Inc. (NYSE:HKIB), Sarcos Technology and Robotics Corporation (NASDAQ:STRC), Mechel PAO (NYSE:MTL), and Orion Engineered Carbons SA (NYSE:OEC). All of these stocks’ market caps match VREX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HA | 13 | 50095 | -3 |
| CET | 3 | 22964 | 0 |
| PLCE | 19 | 116605 | -4 |
| HKIB | 1 | 5219 | 0 |
| STRC | 19 | 34891 | 19 |
| MTL | 8 | 12237 | -1 |
| OEC | 21 | 177527 | -2 |
| Average | 12 | 59934 | 1.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $143 million in VREX’s case. Orion Engineered Carbons SA (NYSE:OEC) is the most popular stock in this table. On the other hand AMTD International Inc. (NYSE:HKIB) is the least popular one with only 1 bullish hedge fund positions. Varex Imaging Corporation (NASDAQ:VREX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VREX is 88.6. 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. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on VREX as the stock returned 11.9% since the end of Q3 (through 12/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
