After several tireless days we have finished crunching the numbers from nearly 900 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Medtronic plc (NYSE:MDT).
Is Medtronic plc (NYSE:MDT) the right investment to pursue these days? Prominent investors were taking a pessimistic view. The number of long hedge fund bets went down by 6 recently. Medtronic plc (NYSE:MDT) was in 62 hedge funds’ portfolios at the end of September. The all time high for this statistic is 68. Our calculations also showed that MDT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
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. Now we’re going to take a look at the recent hedge fund action encompassing Medtronic plc (NYSE:MDT).
Justin John Ferayorni of Tamarack Capital Management
Do Hedge Funds Think MDT Is A Good Stock To Buy Now?
At Q3’s end, a total of 62 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the previous quarter. By comparison, 62 hedge funds held shares or bullish call options in MDT a year ago. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
The largest stake in Medtronic plc (NYSE:MDT) was held by Two Sigma Advisors, which reported holding $373.5 million worth of stock at the end of September. It was followed by Fisher Asset Management with a $304.7 million position. Other investors bullish on the company included AQR Capital Management, Adage Capital Management, and D E Shaw. In terms of the portfolio weights assigned to each position Tamarack Capital Management allocated the biggest weight to Medtronic plc (NYSE:MDT), around 7.92% of its 13F portfolio. Tri Locum Partners is also relatively very bullish on the stock, dishing out 5.18 percent of its 13F equity portfolio to MDT.
Because Medtronic plc (NYSE:MDT) has witnessed a decline in interest from the entirety of the hedge funds we track, we can see that there is a sect of hedgies that slashed their full holdings in the third quarter. Intriguingly, Matthew Stadelman’s Diamond Hill Capital sold off the largest stake of the 750 funds monitored by Insider Monkey, totaling an estimated $571.1 million in stock. Joseph Edelman’s fund, Perceptive Advisors, also cut its stock, about $55.9 million worth. These transactions are interesting, as total hedge fund interest was cut by 6 funds in the third quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Medtronic plc (NYSE:MDT) but similarly valued. These stocks are T-Mobile US, Inc. (NASDAQ:TMUS), SAP SE (NYSE:SAP), United Parcel Service, Inc. (NYSE:UPS), Moderna, Inc. (NASDAQ:MRNA), NextEra Energy, Inc. (NYSE:NEE), Linde plc (NYSE:LIN), and Charter Communications, Inc. (NASDAQ:CHTR). This group of stocks’ market valuations match MDT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TMUS | 89 | 6928776 | -11 |
| SAP | 15 | 1529829 | -2 |
| UPS | 42 | 1266269 | -10 |
| MRNA | 49 | 7315014 | 12 |
| NEE | 53 | 2374429 | -6 |
| LIN | 46 | 4769164 | -9 |
| CHTR | 74 | 18794064 | -1 |
| Average | 52.6 | 6139649 | -3.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 52.6 hedge funds with bullish positions and the average amount invested in these stocks was $6140 million. That figure was $2279 million in MDT’s case. T-Mobile US, Inc. (NASDAQ:TMUS) is the most popular stock in this table. On the other hand SAP SE (NYSE:SAP) is the least popular one with only 15 bullish hedge fund positions. Medtronic plc (NYSE:MDT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MDT is 58.1. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately MDT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MDT were disappointed as the stock returned -14.9% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Medtronic Inc (Old Filings) (NYSE:MDT)
Follow Medtronic Inc (Old Filings) (NYSE:MDT)
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Disclosure: None. This article was originally published at Insider Monkey.
