Thermo Fisher Scientific Inc. (TMO), HCA Holdings Inc (HCA) & Two More: Should You Follow Cryder Capital Into Its Top Picks?

How do hedge funds feel about Thermo Fisher Scientific Inc. (NYSE:TMO), HCA Holdings Inc (NYSE:HCA), Alliance Data Systems Corporation (NYSE:ADS), and Westinghouse Air Brake Technologies Corp (NYSE:WAB)? The sentiment towards each stock is different, but one fund that had all these four companies in its equity portfolio at the end if June is Cryder Capital, managed by Ferdinand Groos.

Cryder Capital’s equity portfolio was valued at $170.62 million at the end of September, up from $124.64 million at the end of June. The fund’s 10 long positions in companies worth at least $1.0 billion posted a weighted average return of 10.83% in the third quarter, based on the size of these holdings at the end of June. Even though our calculations of the weighted average return differ from the fund’s actual return, because we don’t factor in the short positions, and some other instruments, they still give us a useful tool for examining the fund’s investment expertise. With this in mind, we’ll take a look at the fund’s positions in the above-mentioned companies, and see how did these stocks perform in the third quarter.

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First stock we are going to discuss in this article is Thermo Fisher Scientific Inc. (NYSE:TMO), which is a developer of biotechnology products. In the June quarter, Cryder Capital raised its stake by 10%, and then in the third quarter by 31% more, reporting a position that was worth $26.2 million, and contained 164,704 shares at the end of September. This was a good investment move for the fund, considering that the stock gained 7.8% in the third quarter. Thermo Fisher Scientific was included in the equity portfolios of 57 funds from our database at the end of the second quarter of 2016, whereas there had been 50 funds with long positions at the end of March. Among these funds, Eagle Capital Management held the most valuable stake in Thermo Fisher Scientific Inc. (NYSE:TMO), which was worth $638.2 million at the end of the second quarter. On the second spot was Glenview Capital, which amassed $422.3 million worth of shares. Moreover, Select Equity Group, First Pacific Advisors LLC, and OrbiMed Advisors were also bullish on Thermo Fisher Scientific Inc. (NYSE:TMO).

Cryder Capital boosted its stake in HCA Holdings Inc (NYSE:HCA), a healthcare service company, by 10% in the June quarter, to 237,901 shares, and then again in the third quarter by 32%, ending September with a stake of 314,531 shares valued at $23.79 million. Over the past 12 months, the company’s shares have gained 8.26%, but its third-quarter performance was not that good as the stock inched down by 1.8%. At the end of the second quarter, a total of 72 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from the previous quarter. The largest stake in HCA Holdings Inc (NYSE:HCA) was held by Glenview Capital, which reported holding $1.12 billion worth of stock as of the end of June. It was followed by OrbiMed Advisors with a $315.6 million position. Other investors bullish on the company included Lakewood Capital Management, OZ Management, and PAR Capital Management.

The fund was also bullish in both quarters on Alliance Data Systems Corporation (NYSE:ADS), whose stock gained 9.5% in the third quarter. Between April and June, Cryder Capital increased its stake by 11% to 87,222 shares, and last quarter it raised the position by another 19% to 104,622 shares worth $22.45 million. During the second quarter, the number of funds tracked by our team long Alliance Data Systems inched down by one to 33. Among these funds, ValueAct Capital held the most valuable stake in Alliance Data Systems Corporation (NYSE:ADS), which was worth $644.2 million at the end of the second quarter. On the second spot was JANA Partners which amassed $132.3 million worth of shares. Moreover, Millennium Management, Citadel Investment Group, and Hutchin Hill Capital were also bullish on Alliance Data Systems Corporation (NYSE:ADS).

Back in the second quarter, Cryder Capital lowered its stake in Westinghouse Air Brake Technologies Corp (NYSE:WAB) by 3% to 219,165 shares. In the third quarter, amid a 16.4% growth registered by the stock, the fund boosted the holding by 20% to  264,915 shares worth $21.63 million. Westinghouse Air Brake Technologies Corp (NYSE:WAB) was included in the equity portfolios of 27 funds from our database at the end of June, up by eight funds over the quarter. The largest stake in Westinghouse Air Brake Technologies Corp (NYSE:WAB) was held by Select Equity Group, which reported holding $191.5 million worth of stock as of the end of June. It was followed by Millennium Management with a $35.5 million position. Other investors bullish on the company included Renaissance Technologies, Clinton Group, and Royce & Associates.

Disclosure: none