Is LivaNova PLC (NASDAQ:LIVN) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
LivaNova PLC (NASDAQ:LIVN) has experienced a decrease in hedge fund sentiment in recent months. LivaNova PLC (NASDAQ:LIVN) was in 28 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 30. There were 30 hedge funds in our database with LIVN positions at the end of the fourth quarter. Our calculations also showed that LIVN isn’t among the 30 most popular stocks among hedge funds (click for Q1 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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Ricky Sandler of Eminence Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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 let’s take a look at the fresh hedge fund action regarding LivaNova PLC (NASDAQ:LIVN).
Do Hedge Funds Think LIVN Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from the previous quarter. On the other hand, there were a total of 24 hedge funds with a bullish position in LIVN a year ago. With hedge funds’ capital changing hands, there exists a few notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
The largest stake in LivaNova PLC (NASDAQ:LIVN) was held by Eminence Capital, which reported holding $102.7 million worth of stock at the end of December. It was followed by Hawk Ridge Management with a $95.7 million position. Other investors bullish on the company included Paradice Investment Management, Maverick Capital, and Redmile Group. In terms of the portfolio weights assigned to each position Hawk Ridge Management allocated the biggest weight to LivaNova PLC (NASDAQ:LIVN), around 6.56% of its 13F portfolio. Paradice Investment Management is also relatively very bullish on the stock, designating 4.29 percent of its 13F equity portfolio to LIVN.
Seeing as LivaNova PLC (NASDAQ:LIVN) has experienced a decline in interest from hedge fund managers, we can see that there lies a certain “tier” of hedge funds that decided to sell off their full holdings by the end of the first quarter. Intriguingly, Arthur B Cohen and Joseph Healey’s Healthcor Management LP said goodbye to the largest investment of the 750 funds followed by Insider Monkey, valued at close to $40.8 million in stock. Roberto Mignone’s fund, Bridger Management, also cut its stock, about $14.3 million worth. These moves are interesting, as total hedge fund interest was cut by 2 funds by the end of the first quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as LivaNova PLC (NASDAQ:LIVN) but similarly valued. These stocks are Texas Capital Bancshares Inc (NASDAQ:TCBI), Altra Industrial Motion Corp. (NASDAQ:AIMC), First Hawaiian, Inc. (NASDAQ:FHB), Hillenbrand, Inc. (NYSE:HI), LivePerson, Inc. (NASDAQ:LPSN), ChemoCentryx Inc (NASDAQ:CCXI), and National Vision Holdings, Inc. (NASDAQ:EYE). This group of stocks’ market valuations are similar to LIVN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TCBI | 29 | 300284 | 19 |
| AIMC | 18 | 34178 | 3 |
| FHB | 19 | 174114 | 5 |
| HI | 15 | 17557 | 2 |
| LPSN | 31 | 193585 | -4 |
| CCXI | 20 | 385704 | -3 |
| EYE | 24 | 285800 | 0 |
| Average | 22.3 | 198746 | 3.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.3 hedge funds with bullish positions and the average amount invested in these stocks was $199 million. That figure was $694 million in LIVN’s case. LivePerson, Inc. (NASDAQ:LPSN) is the most popular stock in this table. On the other hand Hillenbrand, Inc. (NYSE:HI) is the least popular one with only 15 bullish hedge fund positions. LivaNova PLC (NASDAQ:LIVN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LIVN is 71.6. 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 July 9th and beat the market again by 6.7 percentage points. Unfortunately LIVN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LIVN were disappointed as the stock returned 9.8% since the end of March (through 7/9) 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.
