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 Medtronic plc (NYSE:MDT).
Medtronic plc (NYSE:MDT) shareholders have witnessed an increase in hedge fund interest in recent months. Medtronic plc (NYSE:MDT) was in 68 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 66. This means the bullish number of hedge fund positions in this stock currently sits at its new all time high. There were 65 hedge funds in our database with MDT positions at the end of the first quarter. Our calculations also showed that MDT isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Louis Bacon Moore of Moore Capital
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. Now let’s check out the new hedge fund action surrounding Medtronic plc (NYSE:MDT).
Do Hedge Funds Think MDT Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 68 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 5% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MDT over the last 24 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
Among these funds, Diamond Hill Capital held the most valuable stake in Medtronic plc (NYSE:MDT), which was worth $571.1 million at the end of the second quarter. On the second spot was Two Sigma Advisors which amassed $407.9 million worth of shares. D E Shaw, Fisher Asset Management, and Millennium 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 Tri Locum Partners allocated the biggest weight to Medtronic plc (NYSE:MDT), around 11.42% of its 13F portfolio. Antipodes Partners is also relatively very bullish on the stock, designating 4.69 percent of its 13F equity portfolio to MDT.
Now, some big names were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the largest position in Medtronic plc (NYSE:MDT). Arrowstreet Capital had $87.3 million invested in the company at the end of the quarter. Joseph Edelman’s Perceptive Advisors also initiated a $55.9 million position during the quarter. The other funds with new positions in the stock are Louis Bacon’s Moore Global Investments, Renaissance Technologies, and D. E. Shaw’s D E Shaw.
Let’s check out hedge fund activity in other stocks similar to Medtronic plc (NYSE:MDT). These stocks are SAP SE (NYSE:SAP), QUALCOMM, Incorporated (NASDAQ:QCOM), Pinduoduo Inc. (NASDAQ:PDD), AstraZeneca plc (NASDAQ:AZN), Philip Morris International Inc. (NYSE:PM), Royal Dutch Shell plc (NYSE:RDS), and Unilever PLC (NYSE:UL). All of these stocks’ market caps match MDT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SAP | 17 | 1603691 | -2 |
| QCOM | 72 | 4047519 | -1 |
| PDD | 49 | 5276960 | -7 |
| AZN | 37 | 2772286 | 3 |
| PM | 46 | 5973614 | -2 |
| RDS | 38 | 2444791 | 2 |
| UL | 19 | 844216 | -1 |
| Average | 39.7 | 3280440 | -1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 39.7 hedge funds with bullish positions and the average amount invested in these stocks was $3280 million. That figure was $3391 million in MDT’s case. QUALCOMM, Incorporated (NASDAQ:QCOM) is the most popular stock in this table. On the other hand SAP SE (NYSE:SAP) is the least popular one with only 17 bullish hedge fund positions. Medtronic plc (NYSE:MDT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MDT is 84.4. 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 26.3% in 2021 through October 29th and beat the market again by 2.3 percentage points. Unfortunately MDT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MDT were disappointed as the stock returned -3% since the end of June (through 10/29) 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 Medtronic Inc (Old Filings) (NYSE:MDT)
Follow Medtronic Inc (Old Filings) (NYSE:MDT)
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Disclosure: None. This article was originally published at Insider Monkey.
