Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Bausch Health Companies Inc. (NYSE:BHC).
Is Bausch Health Companies Inc. (NYSE:BHC) going to take off soon? The best stock pickers were in a bullish mood. The number of long hedge fund bets improved by 3 lately. Bausch Health Companies Inc. (NYSE:BHC) was in 45 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 43. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that BHC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
To the average investor there are several gauges stock traders put to use to grade stocks. Some of the most useful gauges are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the elite hedge fund managers can outpace the S&P 500 by a healthy margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Carl Icahn of Icahn Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, billionaire John Paulson is loading up on the miners, so we are checking out stock pitches like this mining 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. Keeping this in mind let’s take a peek at the latest hedge fund action encompassing Bausch Health Companies Inc. (NYSE:BHC).
Do Hedge Funds Think BHC Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 45 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 7% from the previous quarter. By comparison, 35 hedge funds held shares or bullish call options in BHC a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Icahn Capital LP held the most valuable stake in Bausch Health Companies Inc. (NYSE:BHC), which was worth $1000.1 million at the end of the second quarter. On the second spot was Paulson & Co which amassed $757.6 million worth of shares. ValueAct Capital, Glenview Capital, and GoldenTree 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 Chou Associates Management allocated the biggest weight to Bausch Health Companies Inc. (NYSE:BHC), around 19.17% of its 13F portfolio. Paulson & Co is also relatively very bullish on the stock, dishing out 18.1 percent of its 13F equity portfolio to BHC.
Consequently, key hedge funds have jumped into Bausch Health Companies Inc. (NYSE:BHC) headfirst. Fir Tree, managed by Jeffrey Tannenbaum, created the most outsized position in Bausch Health Companies Inc. (NYSE:BHC). Fir Tree had $45.6 million invested in the company at the end of the quarter. Leon Cooperman’s Omega Advisors also made a $20.2 million investment in the stock during the quarter. The other funds with brand new BHC positions are Francis Chou’s Chou Associates Management, Simon Sadler’s Segantii Capital, and Himanshu Gulati’s Antara Capital.
Let’s now review hedge fund activity in other stocks similar to Bausch Health Companies Inc. (NYSE:BHC). These stocks are Universal Display Corporation (NASDAQ:OLED), Lithia Motors Inc (NYSE:LAD), Henry Schein, Inc. (NASDAQ:HSIC), GFL Environmental Inc. (NYSE:GFL), Paylocity Holding Corp (NASDAQ:PCTY), Ares Management Corp (NYSE:ARES), and Kirkland Lake Gold Ltd. (NYSE:KL). All of these stocks’ market caps are similar to BHC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OLED | 23 | 105427 | 6 |
| LAD | 63 | 2924134 | 23 |
| HSIC | 39 | 1387222 | 7 |
| GFL | 23 | 670524 | 1 |
| PCTY | 19 | 507279 | -3 |
| ARES | 20 | 686208 | 4 |
| KL | 22 | 391037 | -3 |
| Average | 29.9 | 953119 | 5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.9 hedge funds with bullish positions and the average amount invested in these stocks was $953 million. That figure was $3997 million in BHC’s case. Lithia Motors Inc (NYSE:LAD) is the most popular stock in this table. On the other hand Paylocity Holding Corp (NASDAQ:PCTY) is the least popular one with only 19 bullish hedge fund positions. Bausch Health Companies Inc. (NYSE:BHC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BHC is 67.5. 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 29.6% in 2021 through November 5th and beat the market again by 3.1 percentage points. Unfortunately BHC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BHC were disappointed as the stock returned -4.6% since the end of June (through 11/5) 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 Bausch Health Companies Inc. (NYSE:BHC)
Follow Bausch Health Companies Inc. (NYSE:BHC)
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Disclosure: None. This article was originally published at Insider Monkey.
