Where Do Hedge Funds Stand On Steris Plc (STE)?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 873 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 30th holdings, data that is available nowhere else. Should you consider Steris Plc (NYSE:STE) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Steris Plc (NYSE:STE) was in 35 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 40. STE has experienced an increase in activity from the world’s largest hedge funds recently. There were 30 hedge funds in our database with STE holdings at the end of March. Our calculations also showed that STE 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.

David Blood of Generation Investment Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech 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 key hedge fund action encompassing Steris Plc (NYSE:STE).

Do Hedge Funds Think STE Is A Good Stock To Buy Now?

At second quarter’s end, a total of 35 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 17% from the previous quarter. By comparison, 40 hedge funds held shares or bullish call options in STE a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

The largest stake in Steris Plc (NYSE:STE) was held by Generation Investment Management, which reported holding $651.6 million worth of stock at the end of June. It was followed by Select Equity Group with a $330.2 million position. Other investors bullish on the company included Fisher Asset Management, Echo Street Capital Management, and Diker Management. In terms of the portfolio weights assigned to each position Diker Management allocated the biggest weight to Steris Plc (NYSE:STE), around 33.18% of its 13F portfolio. Generation Investment Management is also relatively very bullish on the stock, dishing out 2.7 percent of its 13F equity portfolio to STE.

With a general bullishness amongst the heavyweights, key money managers were leading the bulls’ herd. Diker Management, managed by Mark N. Diker, created the biggest position in Steris Plc (NYSE:STE). Diker Management had $75.6 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $37.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Renaissance Technologies, John Overdeck and David Siegel’s Two Sigma Advisors, and Dmitry Balyasny’s Balyasny Asset Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Steris Plc (NYSE:STE) but similarly valued. We will take a look at Trimble Inc. (NASDAQ:TRMB), Ingersoll Rand Inc. (NYSE:IR), Ameren Corporation (NYSE:AEE), Fox Corporation (NASDAQ:FOX), ZoomInfo Technologies Inc. (NASDAQ:ZI), Logitech International SA (NASDAQ:LOGI), and FirstEnergy Corp. (NYSE:FE). All of these stocks’ market caps match STE’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 28.1 hedge funds with bullish positions and the average amount invested in these stocks was $911 million. That figure was $1784 million in STE’s case. FirstEnergy Corp. (NYSE:FE) is the most popular stock in this table. On the other hand Logitech International SA (NASDAQ:LOGI) is the least popular one with only 20 bullish hedge fund positions. Steris Plc (NYSE:STE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for STE is 83.1. 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 gained 21.8% in 2021 through October 11th and still beat the market by 4.4 percentage points. Hedge funds were also right about betting on STE as the stock returned 7.6% since the end of Q2 (through 10/11) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.

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