We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards Viatris Inc. (NASDAQ:VTRS) and determine whether hedge funds skillfully traded this stock.
Is Viatris Inc. (NASDAQ:VTRS) a marvelous stock to buy now? Hedge funds were becoming more confident. The number of bullish hedge fund positions advanced by 2 in recent months. Viatris Inc. (NASDAQ:VTRS) was in 55 hedge funds’ portfolios at the end of the third quarter of 2021. 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 Q3 rankings). There were 53 hedge funds in our database with VTRS positions at the end of the second quarter.
James E. Flynn of Deerfield 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. Now let’s view the fresh hedge fund action encompassing Viatris Inc. (NASDAQ:VTRS).
Do Hedge Funds Think VTRS Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 55 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the second quarter of 2021. On the other hand, there were a total of 48 hedge funds with a bullish position in VTRS a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Benjamin A. Smith’s Laurion Capital Management has the most valuable position in Viatris Inc. (NASDAQ:VTRS), worth close to $457.2 million, comprising 1.9% of its total 13F portfolio. Coming in second is Deerfield Management, led by James E. Flynn, holding a $255.1 million position; the fund has 5% of its 13F portfolio invested in the stock. Some other peers with similar optimism comprise Stephen DuBois’s Camber Capital Management, David Greenspan’s Slate Path Capital and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Slate Path Capital allocated the biggest weight to Viatris Inc. (NASDAQ:VTRS), around 7.32% of its 13F portfolio. Camber Capital Management is also relatively very bullish on the stock, dishing out 5.01 percent of its 13F equity portfolio to VTRS.
As industrywide interest jumped, specific money managers were breaking ground themselves. TwinBeech Capital, managed by Jinghua Yan, assembled the biggest position in Viatris Inc. (NASDAQ:VTRS). TwinBeech Capital had $7.5 million invested in the company at the end of the quarter. John Murphy’s Levin Easterly Partners also initiated a $7.3 million position during the quarter. The other funds with new positions in the stock are Dmitry Balyasny’s Balyasny Asset Management, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Greg Eisner’s Engineers Gate Manager.
Let’s now take a look at hedge fund activity in other stocks similar to Viatris Inc. (NASDAQ:VTRS). These stocks are Westinghouse Air Brake Technologies Corporation (NYSE:WAB), Conagra Brands, Inc. (NYSE:CAG), Coupa Software Incorporated (NASDAQ:COUP), GoodRx Holdings, Inc. (NASDAQ:GDRX), 10x Genomics, Inc. (NASDAQ:TXG), MarketAxess Holdings Inc. (NASDAQ:MKTX), and DLocal Limited (NASDAQ:DLO). This group of stocks’ market values are closest to VTRS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WAB | 38 | 2982164 | -8 |
| CAG | 20 | 625323 | -9 |
| COUP | 52 | 4542300 | -2 |
| GDRX | 26 | 1063016 | -2 |
| TXG | 28 | 963031 | 0 |
| MKTX | 29 | 730008 | -2 |
| DLO | 19 | 480501 | 19 |
| Average | 30.3 | 1626620 | -0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 30.3 hedge funds with bullish positions and the average amount invested in these stocks was $1627 million. That figure was $1466 million in VTRS’s case. Coupa Software Incorporated (NASDAQ:COUP) is the most popular stock in this table. On the other hand DLocal Limited (NASDAQ:DLO) is the least popular one with only 19 bullish hedge fund positions. Compared to these stocks Viatris Inc. (NASDAQ:VTRS) is more popular among hedge funds. Our overall hedge fund sentiment score for VTRS is 79.3. 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 29.6% in 2021 and managed to beat the market by another 3.6 percentage points. Hedge funds were also right about betting on VTRS as the stock returned 11.4% since the end of September (through 1/31) 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.
