Should I Buy Syneos Health, Inc. (SYNH)?

While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Syneos Health, Inc. (NASDAQ:SYNH).

Syneos Health, Inc. (NASDAQ:SYNH) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 33 hedge funds’ portfolios at the end of the third quarter of 2021. Our calculations also showed that SYNH isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Reliance Steel & Aluminum Co. (NYSE:RS), GXO Logistics Inc. (NYSE:GXO), and Crocs, Inc. (NASDAQ:CROX) to gather more data points.

Michael Lowenstein of Kensico Capital

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. Keeping this in mind let’s view the recent hedge fund action encompassing Syneos Health, Inc. (NASDAQ:SYNH).

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

At the end of September, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 40 hedge funds with a bullish position in SYNH a year ago. 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, GQG Partners held the most valuable stake in Syneos Health, Inc. (NASDAQ:SYNH), which was worth $92.4 million at the end of the third quarter. On the second spot was Cardinal Capital which amassed $81.2 million worth of shares. Kensico Capital, Lakewood Capital Management, and AQR Capital 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 Sectoral Asset Management allocated the biggest weight to Syneos Health, Inc. (NASDAQ:SYNH), around 2.3% of its 13F portfolio. Lakewood Capital Management is also relatively very bullish on the stock, dishing out 2.01 percent of its 13F equity portfolio to SYNH.

Due to the fact that Syneos Health, Inc. (NASDAQ:SYNH) has faced a decline in interest from the entirety of the hedge funds we track, logic holds that there lies a certain “tier” of hedge funds who sold off their entire stakes last quarter. Intriguingly, Ken Griffin’s Citadel Investment Group dropped the biggest investment of all the hedgies watched by Insider Monkey, comprising about $46.8 million in stock, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors was right behind this move, as the fund sold off about $20.4 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Syneos Health, Inc. (NASDAQ:SYNH) but similarly valued. We will take a look at Reliance Steel & Aluminum Co. (NYSE:RS), GXO Logistics Inc. (NYSE:GXO), Crocs, Inc. (NASDAQ:CROX), First Horizon National Corporation (NYSE:FHN), Juniper Networks, Inc. (NYSE:JNPR), Oatly Group AB (NASDAQ:OTLY), and Dolby Laboratories, Inc. (NYSE:DLB). This group of stocks’ market values resemble SYNH’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 26.3 hedge funds with bullish positions and the average amount invested in these stocks was $537 million. That figure was $475 million in SYNH’s case. Crocs, Inc. (NASDAQ:CROX) is the most popular stock in this table. On the other hand Oatly Group AB (NASDAQ:OTLY) is the least popular one with only 13 bullish hedge fund positions. Syneos Health, Inc. (NASDAQ:SYNH) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SYNH is 71.4. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on SYNH as the stock returned 11.1% since the end of Q3 (through 11/30) 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.

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