In this article you are going to find out whether hedge funds think Hims & Hers Health, Inc. (NYSE:HIMS) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.
Hims & Hers Health, Inc. (NYSE:HIMS) has seen an increase in activity from the world’s largest hedge funds of late. Hims & Hers Health, Inc. (NYSE:HIMS) was in 22 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 18. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that HIMS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
To the average investor there are plenty of metrics market participants can use to analyze their holdings. Two of the less utilized metrics are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the top money managers can outpace the market by a healthy margin (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Howard Marks of Oaktree Capital
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Do Hedge Funds Think HIMS Is A Good Stock To Buy Now?
Heading into the third quarter of 2021, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from the first quarter of 2020. Below, you can check out the change in hedge fund sentiment towards HIMS over the last 24 quarters. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
Among these funds, Thrive Capital held the most valuable stake in Hims & Hers Health, Inc. (NYSE:HIMS), which was worth $166.7 million at the end of the second quarter. On the second spot was Oaktree Capital Management which amassed $41.1 million worth of shares. Maverick Capital, Royce & Associates, and Point72 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 Thrive Capital allocated the biggest weight to Hims & Hers Health, Inc. (NYSE:HIMS), around 10.95% of its 13F portfolio. Oaktree Capital Management is also relatively very bullish on the stock, earmarking 0.56 percent of its 13F equity portfolio to HIMS.
Consequently, key money managers have jumped into Hims & Hers Health, Inc. (NYSE:HIMS) headfirst. Point72 Asset Management, managed by Steve Cohen, established the most outsized position in Hims & Hers Health, Inc. (NYSE:HIMS). Point72 Asset Management had $6.9 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $1.8 million position during the quarter. The other funds with new positions in the stock are Paul Marshall and Ian Wace’s Marshall Wace LLP, Robert Henry Lynch’s Aristeia Capital, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Hims & Hers Health, Inc. (NYSE:HIMS) but similarly valued. We will take a look at Sandy Spring Bancorp Inc. (NASDAQ:SASR), Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD), United Natural Foods, Inc. (NASDAQ:UNFI), Myovant Sciences Ltd. (NYSE:MYOV), Morphic Holding, Inc. (NASDAQ:MORF), Raven Industries, Inc. (NASDAQ:RAVN), and Equinox Gold Corp. (NYSE:EQX). This group of stocks’ market caps are closest to HIMS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SASR | 11 | 33624 | -1 |
| IRWD | 28 | 498451 | 0 |
| UNFI | 15 | 83283 | -8 |
| MYOV | 18 | 103196 | 3 |
| MORF | 19 | 419655 | -3 |
| RAVN | 22 | 265003 | 6 |
| EQX | 16 | 66615 | 1 |
| Average | 18.4 | 209975 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.4 hedge funds with bullish positions and the average amount invested in these stocks was $210 million. That figure was $260 million in HIMS’s case. Ironwood Pharmaceuticals, Inc. (NASDAQ:IRWD) is the most popular stock in this table. On the other hand Sandy Spring Bancorp Inc. (NASDAQ:SASR) is the least popular one with only 11 bullish hedge fund positions. Hims & Hers Health, Inc. (NYSE:HIMS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for HIMS is 71.4. 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 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately HIMS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on HIMS were disappointed as the stock returned -30.3% since the end of June (through 10/22) 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.
