Was The Smart Money Right About IQVIA Holdings, Inc. (IQV)?

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on June 30th. We at Insider Monkey have made an extensive database of more than 873 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded IQVIA Holdings, Inc. (NYSE:IQV) based on those filings.

Is IQVIA Holdings, Inc. (NYSE:IQV) a buy, sell, or hold? The smart money was turning bullish. The number of bullish hedge fund bets inched up by 7 lately. IQVIA Holdings, Inc. (NYSE:IQV) was in 69 hedge funds’ portfolios at the end of June. The all time high for this statistic is 69. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that IQV isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 62 hedge funds in our database with IQV positions at the end of the first quarter.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Dan Loeb of Third Point

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, the demand for helium is soaring and there is a helium supply shortage, so we are checking out stock pitches like this emerging helium 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 we’re going to analyze the fresh hedge fund action surrounding IQVIA Holdings, Inc. (NYSE:IQV).

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

At the end of June, a total of 69 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in IQV over the last 24 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).

The largest stake in IQVIA Holdings, Inc. (NYSE:IQV) was held by Farallon Capital, which reported holding $694.7 million worth of stock at the end of June. It was followed by Arrowstreet Capital with a $304.1 million position. Other investors bullish on the company included Impax Asset Management, Third Point, and Steadfast Capital Management. In terms of the portfolio weights assigned to each position RIT Capital Partners allocated the biggest weight to IQVIA Holdings, Inc. (NYSE:IQV), around 19.53% of its 13F portfolio. Cowbird Capital is also relatively very bullish on the stock, dishing out 9.42 percent of its 13F equity portfolio to IQV.

As aggregate interest increased, some big names were leading the bulls’ herd. Atalan Capital, managed by David Thomas, initiated the largest position in IQVIA Holdings, Inc. (NYSE:IQV). Atalan Capital had $60.6 million invested in the company at the end of the quarter. Renaissance Technologies also initiated a $55.9 million position during the quarter. The other funds with new positions in the stock are Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management, Dmitry Balyasny’s Balyasny Asset Management, and Peter Muller’s PDT Partners.

Let’s check out hedge fund activity in other stocks similar to IQVIA Holdings, Inc. (NYSE:IQV). These stocks are Walgreens Boots Alliance Inc (NASDAQ:WBA), National Grid plc (NYSE:NGG), Koninklijke Philips NV (NYSE:PHG), Lloyds Banking Group PLC (NYSE:LYG), Kimberly Clark Corporation (NYSE:KMB), Constellation Brands, Inc. (NYSE:STZ), and T. Rowe Price Group, Inc. (NASDAQ:TROW). This group of stocks’ market caps are closest to IQV’s market cap.

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As you can see these stocks had an average of 25.3 hedge funds with bullish positions and the average amount invested in these stocks was $646 million. That figure was $3809 million in IQV’s case. Constellation Brands, Inc. (NYSE:STZ) is the most popular stock in this table. On the other hand National Grid plc (NYSE:NGG) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks IQVIA Holdings, Inc. (NYSE:IQV) is more popular among hedge funds. Our overall hedge fund sentiment score for IQV is 90. 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 returned 26.3% in 2021 through October 29th but still managed to beat the market by 2.3 percentage points. Hedge funds were also right about betting on IQV as the stock returned 7.9% since the end of June (through 10/29) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.