Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about HCA Healthcare Inc (NYSE:HCA) in this article.
HCA Healthcare Inc (NYSE:HCA) was in 60 hedge funds’ portfolios at the end of June. The all time high for this statistic is 87. HCA investors should pay attention to a decrease in enthusiasm from smart money lately. There were 62 hedge funds in our database with HCA holdings at the end of March. Our calculations also showed that HCA isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
To most investors, hedge funds are perceived as slow, old financial tools of yesteryear. While there are greater than 8000 funds with their doors open at the moment, Our experts hone in on the aristocrats of this group, about 850 funds. These investment experts preside over the lion’s share of the hedge fund industry’s total asset base, and by keeping track of their best equity investments, Insider Monkey has identified various investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. 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.
Glenn Greenberg of Brave Warrior Capital
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Do Hedge Funds Think HCA Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 60 of the hedge funds tracked by Insider Monkey were long this stock, a change of -3% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards HCA over the last 24 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Arrowstreet Capital was the largest shareholder of HCA Healthcare Inc (NYSE:HCA), with a stake worth $465.6 million reported as of the end of June. Trailing Arrowstreet Capital was Lyrical Asset Management, which amassed a stake valued at $367.5 million. Cryder Capital, Abrams Bison Investments, and Brave Warrior Capital 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 Abrams Bison Investments allocated the biggest weight to HCA Healthcare Inc (NYSE:HCA), around 18.6% of its 13F portfolio. Cryder Capital is also relatively very bullish on the stock, setting aside 12.05 percent of its 13F equity portfolio to HCA.
Because HCA Healthcare Inc (NYSE:HCA) has experienced falling interest from hedge fund managers, it’s easy to see that there were a few fund managers who sold off their positions entirely in the second quarter. At the top of the heap, Andreas Halvorsen’s Viking Global dumped the biggest investment of the 750 funds followed by Insider Monkey, comprising about $282.3 million in stock, and Anand Parekh’s Alyeska Investment Group was right behind this move, as the fund said goodbye to about $50.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 2 funds in the second quarter.
Let’s also examine hedge fund activity in other stocks similar to HCA Healthcare Inc (NYSE:HCA). We will take a look at ABB Ltd (NYSE:ABB), Twilio Inc. (NYSE:TWLO), Moody’s Corporation (NYSE:MCO), Banco Santander, S.A. (NYSE:SAN), VMware, Inc. (NYSE:VMW), Intercontinental Exchange Inc (NYSE:ICE), and Norfolk Southern Corp. (NYSE:NSC). This group of stocks’ market values are similar to HCA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ABB | 15 | 658036 | 4 |
| TWLO | 98 | 7891057 | -1 |
| MCO | 44 | 16046255 | -11 |
| SAN | 17 | 566333 | 2 |
| VMW | 28 | 819778 | 3 |
| ICE | 47 | 2946268 | -11 |
| NSC | 58 | 1488960 | 12 |
| Average | 43.9 | 4345241 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 43.9 hedge funds with bullish positions and the average amount invested in these stocks was $4345 million. That figure was $2696 million in HCA’s case. Twilio Inc. (NYSE:TWLO) is the most popular stock in this table. On the other hand ABB Ltd (NYSE:ABB) is the least popular one with only 15 bullish hedge fund positions. HCA Healthcare Inc (NYSE:HCA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HCA is 50.8. 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 26.3% in 2021 through October 29th and still beat the market by 2.3 percentage points. Hedge funds were also right about betting on HCA as the stock returned 21.4% since the end of Q2 (through 10/29) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Hca Healthcare Inc. (NYSE:HCA)
Follow Hca Healthcare Inc. (NYSE:HCA)
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Disclosure: None. This article was originally published at Insider Monkey.
