Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of HCA Healthcare Inc (NYSE:HCA) based on that data and determine whether they were really smart about the stock.
HCA Healthcare Inc (NYSE:HCA) investors should be aware of an increase in activity from the world’s largest hedge funds of late. HCA Healthcare Inc (NYSE:HCA) was in 72 hedge funds’ portfolios at the end of September. The all time high for this statistic is 87. There were 60 hedge funds in our database with HCA positions at the end of the second quarter. Our calculations also showed that HCA isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Dmitry Balyasny of Balyasny Asset Management
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 we’re going to view the new hedge fund action surrounding HCA Healthcare Inc (NYSE:HCA).
Do Hedge Funds Think HCA Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 72 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards HCA over the last 25 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in HCA Healthcare Inc (NYSE:HCA) was held by Arrowstreet Capital, which reported holding $556.4 million worth of stock at the end of September. It was followed by Cryder Capital with a $272.3 million position. Other investors bullish on the company included Lyrical Asset Management, Abrams Bison Investments, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Abrams Bison Investments allocated the biggest weight to HCA Healthcare Inc (NYSE:HCA), around 18.76% of its 13F portfolio. Cryder Capital is also relatively very bullish on the stock, setting aside 13.59 percent of its 13F equity portfolio to HCA.
As aggregate interest increased, some big names have jumped into HCA Healthcare Inc (NYSE:HCA) headfirst. Citadel Investment Group, managed by Ken Griffin, established the largest position in HCA Healthcare Inc (NYSE:HCA). Citadel Investment Group had $174 million invested in the company at the end of the quarter. OrbiMed Advisors also initiated a $47 million position during the quarter. The following funds were also among the new HCA investors: Dmitry Balyasny’s Balyasny Asset Management, Kevin Molloy’s Iron Triangle Partners, and Louis Bacon’s Moore Global Investments.
Let’s go over hedge fund activity in other stocks similar to HCA Healthcare Inc (NYSE:HCA). We will take a look at Zoom Video Communications, Inc. (NASDAQ:ZM), Marsh & McLennan Companies, Inc. (NYSE:MMC), General Motors Company (NYSE:GM), Fidelity National Information Services Inc. (NYSE:FIS), Duke Energy Corporation (NYSE:DUK), Crown Castle International Corp. (NYSE:CCI), and Chubb Limited (NYSE:CB). All of these stocks’ market caps are closest to HCA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ZM | 56 | 6003836 | -3 |
| MMC | 42 | 1987176 | 1 |
| GM | 77 | 6416552 | -9 |
| FIS | 69 | 6044245 | -3 |
| DUK | 32 | 687541 | -4 |
| CCI | 45 | 2089073 | 3 |
| CB | 30 | 1272774 | -12 |
| Average | 50.1 | 3500171 | -3.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 50.1 hedge funds with bullish positions and the average amount invested in these stocks was $3500 million. That figure was $3310 million in HCA’s case. General Motors Company (NYSE:GM) is the most popular stock in this table. On the other hand Chubb Limited (NYSE:CB) is the least popular one with only 30 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 79.5. 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 and beat the market again by 3.6 percentage points. Unfortunately, HCA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HCA were disappointed as the stock returned -0.9% since the end of September (through 1/31) 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 all of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
