Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4 years and analyze what the smart money thinks of LivaNova PLC (NASDAQ:LIVN) based on that data.
Is LivaNova PLC (NASDAQ:LIVN) an exceptional investment right now? Investors who are in the know are getting less bullish. The number of bullish hedge fund bets were trimmed by 3 lately. Our calculations also showed that LIVN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). LIVN was in 13 hedge funds’ portfolios at the end of September. There were 16 hedge funds in our database with LIVN positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are tons of formulas investors can use to evaluate their holdings. A pair of the less utilized formulas are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the top fund managers can outclass the broader indices by a solid margin (see the details here).
Ken Fisher of Fisher Asset Management
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December we recommended Adams Energy based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. Let’s take a look at the new hedge fund action surrounding LivaNova PLC (NASDAQ:LIVN).
What have hedge funds been doing with LivaNova PLC (NASDAQ:LIVN)?
At Q3’s end, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -19% from the second quarter of 2019. By comparison, 30 hedge funds held shares or bullish call options in LIVN a year ago. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
More specifically, D E Shaw was the largest shareholder of LivaNova PLC (NASDAQ:LIVN), with a stake worth $37.5 million reported as of the end of September. Trailing D E Shaw was Citadel Investment Group, which amassed a stake valued at $35.5 million. Redmile Group, Millennium Management, and Fisher 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 Redmile Group allocated the biggest weight to LivaNova PLC (NASDAQ:LIVN), around 0.85% of its 13F portfolio. Gotham Asset Management is also relatively very bullish on the stock, setting aside 0.07 percent of its 13F equity portfolio to LIVN.
Because LivaNova PLC (NASDAQ:LIVN) has experienced a decline in interest from hedge fund managers, logic holds that there lies a certain “tier” of fund managers who sold off their full holdings last quarter. Intriguingly, Steve Cohen’s Point72 Asset Management cut the biggest investment of the 750 funds tracked by Insider Monkey, comprising an estimated $17.7 million in stock, and Lee Ainslie’s Maverick Capital was right behind this move, as the fund dropped about $5.1 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 3 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks similar to LivaNova PLC (NASDAQ:LIVN). We will take a look at Neogen Corporation (NASDAQ:NEOG), National Health Investors Inc (NYSE:NHI), First Hawaiian, Inc. (NASDAQ:FHB), and Plains GP Holdings LP (NYSE:PAGP). This group of stocks’ market valuations resemble LIVN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NEOG | 13 | 24715 | 1 |
| NHI | 15 | 131310 | 2 |
| FHB | 18 | 208814 | -3 |
| PAGP | 18 | 216040 | 1 |
| Average | 16 | 145220 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $145 million. That figure was $154 million in LIVN’s case. First Hawaiian, Inc. (NASDAQ:FHB) is the most popular stock in this table. On the other hand Neogen Corporation (NASDAQ:NEOG) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks LivaNova PLC (NASDAQ:LIVN) is even less popular than NEOG. Hedge funds clearly dropped the ball on LIVN as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on LIVN as the stock returned 13.5% during the fourth quarter (through the end of November) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
