Should I Buy Stryker Corporation (SYK)?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on Stryker Corporation (NYSE:SYK).

Is Stryker Corporation (NYSE:SYK) a buy here? Investors who are in the know were buying. The number of long hedge fund positions improved by 2 in recent months. Stryker Corporation (NYSE:SYK) was in 48 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 50. Our calculations also showed that SYK isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 46 hedge funds in our database with SYK positions at the end of the first quarter.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Arthur B Cohen and Joseph Healey of Healthcor Management LP

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 homepage. With all of this in mind we’re going to take a gander at the latest hedge fund action surrounding Stryker Corporation (NYSE:SYK).

Do Hedge Funds Think SYK Is A Good Stock To Buy Now?

At the end of June, a total of 48 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. On the other hand, there were a total of 50 hedge funds with a bullish position in SYK a year ago. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

The largest stake in Stryker Corporation (NYSE:SYK) was held by Fundsmith LLP, which reported holding $1821.8 million worth of stock at the end of June. It was followed by Fisher Asset Management with a $737.6 million position. Other investors bullish on the company included Citadel Investment Group, BlueSpruce Investments, and Adage Capital Management. In terms of the portfolio weights assigned to each position Fundsmith LLP allocated the biggest weight to Stryker Corporation (NYSE:SYK), around 5.05% of its 13F portfolio. Blue Whale Capital is also relatively very bullish on the stock, earmarking 4.7 percent of its 13F equity portfolio to SYK.

Now, key money managers have jumped into Stryker Corporation (NYSE:SYK) headfirst. Healthcor Management LP, managed by Arthur B Cohen and Joseph Healey, created the most valuable position in Stryker Corporation (NYSE:SYK). Healthcor Management LP had $71 million invested in the company at the end of the quarter. Brian Ashford-Russell and Tim Woolley’s Polar Capital also made a $8 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Andrew Weiss’s Weiss Asset Management, and D. E. Shaw’s D E Shaw.

Let’s also examine hedge fund activity in other stocks similar to Stryker Corporation (NYSE:SYK). We will take a look at Micron Technology, Inc. (NASDAQ:MU), Moderna, Inc. (NASDAQ:MRNA), Uber Technologies, Inc. (NYSE:UBER), Anthem Inc (NYSE:ANTM), Lam Research Corporation (NASDAQ:LRCX), Airbnb, Inc. (NASDAQ:ABNB), and British American Tobacco plc (NYSE:BTI). This group of stocks’ market valuations are similar to SYK’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 64.9 hedge funds with bullish positions and the average amount invested in these stocks was $4969 million. That figure was $3369 million in SYK’s case. Uber Technologies, Inc. (NYSE:UBER) is the most popular stock in this table. On the other hand British American Tobacco plc (NYSE:BTI) is the least popular one with only 12 bullish hedge fund positions. Stryker Corporation (NYSE:SYK) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for SYK is 50.4. 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 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. A small number of hedge funds were also right about betting on SYK as the stock returned 3.5% since the end of the second quarter (through 10/1) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.