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 second 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 Viatris Inc. (NASDAQ:VTRS) based on that data.
Is Viatris Inc. (NASDAQ:VTRS) ready to rally soon? The smart money was becoming less confident. The number of long hedge fund positions fell by 5 recently. Viatris Inc. (NASDAQ:VTRS) was in 53 hedge funds’ portfolios at the end of June. The all time high for this statistic is 74. Our calculations also showed that VTRS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David Harding of Winton Capital Management
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. With all of this in mind let’s take a look at the latest hedge fund action surrounding Viatris Inc. (NASDAQ:VTRS).
Do Hedge Funds Think VTRS Is A Good Stock To Buy Now?
At second quarter’s end, a total of 53 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from the previous quarter. On the other hand, there were a total of 46 hedge funds with a bullish position in VTRS a year ago. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Among these funds, Laurion Capital Management held the most valuable stake in Viatris Inc. (NASDAQ:VTRS), which was worth $469.1 million at the end of the second quarter. On the second spot was Deerfield Management which amassed $269 million worth of shares. Camber Capital Management, Slate Path Capital, and Iridian 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 Slate Path Capital allocated the biggest weight to Viatris Inc. (NASDAQ:VTRS), around 9.45% of its 13F portfolio. Camber Capital Management is also relatively very bullish on the stock, earmarking 5.78 percent of its 13F equity portfolio to VTRS.
Due to the fact that Viatris Inc. (NASDAQ:VTRS) has faced a decline in interest from hedge fund managers, it’s easy to see that there exists a select few funds who were dropping their entire stakes last quarter. Intriguingly, Richard S. Pzena’s Pzena Investment Management cut the biggest position of the “upper crust” of funds followed by Insider Monkey, valued at about $160.2 million in stock, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital was right behind this move, as the fund said goodbye to about $52.5 million worth. These moves are intriguing to say the least, as total hedge fund interest was cut by 5 funds last quarter.
Let’s also examine hedge fund activity in other stocks similar to Viatris Inc. (NASDAQ:VTRS). We will take a look at J.B. Hunt Transport Services, Inc. (NASDAQ:JBHT), Omnicom Group Inc. (NYSE:OMC), Principal Financial Group Inc (NYSE:PFG), Huazhu Group Limited (NASDAQ:HTHT), Zendesk Inc (NYSE:ZEN), Bill.com Holdings, Inc. (NYSE:BILL), and CMS Energy Corporation (NYSE:CMS). This group of stocks’ market values match VTRS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| JBHT | 26 | 347997 | 4 |
| OMC | 30 | 668602 | -3 |
| PFG | 18 | 217118 | -13 |
| HTHT | 27 | 657115 | 0 |
| ZEN | 52 | 1851946 | 7 |
| BILL | 53 | 2766914 | 2 |
| CMS | 31 | 693813 | 3 |
| Average | 33.9 | 1029072 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 33.9 hedge funds with bullish positions and the average amount invested in these stocks was $1029 million. That figure was $1532 million in VTRS’s case. Bill.com Holdings, Inc. (NYSE:BILL) is the most popular stock in this table. On the other hand Principal Financial Group Inc (NYSE:PFG) is the least popular one with only 18 bullish hedge fund positions. Viatris Inc. (NASDAQ:VTRS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VTRS is 71.5. 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 VTRS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on VTRS were disappointed as the stock returned -3.2% 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.
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Disclosure: None. This article was originally published at Insider Monkey.
