At the end of February we announced the arrival of the first US recession since 2009 and we predicted that the market will decline by at least 20% in (see why hell is coming). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Haemonetics Corporation (NYSE:HAE) at the end of the first quarter and determine whether the smart money was really smart about this stock.
Is Haemonetics Corporation (NYSE:HAE) ready to rally soon? Investors who are in the know were becoming more confident. The number of bullish hedge fund positions went up by 1 lately. Our calculations also showed that HAE isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a multitude of indicators stock market investors employ to size up publicly traded companies. Two of the most under-the-radar indicators are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the best investment managers can outpace the broader indices by a healthy margin (see the details here).
TUDOR INVESTMENT CORP
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a "weekend trading strategy", so we look into his strategy's picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller's investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we're going to check out the latest hedge fund action regarding Haemonetics Corporation (NYSE:HAE).
What does smart money think about Haemonetics Corporation (NYSE:HAE)?
At the end of the first quarter, a total of 34 of the hedge funds tracked by Insider Monkey were long this stock, a change of 3% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards HAE over the last 18 quarters. With hedge funds' capital changing hands, there exists an "upper tier" of noteworthy hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
Is HAE A Good Stock To Buy?
Among these funds, Renaissance Technologies held the most valuable stake in Haemonetics Corporation (NYSE:HAE), which was worth $217.7 million at the end of the third quarter. On the second spot was Healthcor Management LP which amassed $143.3 million worth of shares. Eminence Capital, Point72 Asset Management, and Nitorum Capital 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 Healthcor Management LP allocated the biggest weight to Haemonetics Corporation (NYSE:HAE), around 6.13% of its 13F portfolio. BeaconLight Capital is also relatively very bullish on the stock, designating 5.93 percent of its 13F equity portfolio to HAE.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls' herd. Point72 Asset Management, managed by Steve Cohen, created the largest position in Haemonetics Corporation (NYSE:HAE). Point72 Asset Management had $45.4 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson's Adage Capital Management also made a $24.9 million investment in the stock during the quarter. The other funds with brand new HAE positions are Ed Bosek's BeaconLight Capital, George McCabe's Portolan Capital Management, and Minhua Zhang's Weld Capital Management.
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Haemonetics Corporation (NYSE:HAE) but similarly valued. We will take a look at RealPage, Inc. (NASDAQ:RP), Kinross Gold Corporation (NYSE:KGC), Pentair plc (NYSE:PNR), and Morningstar, Inc. (NASDAQ:MORN). All of these stocks' market caps match HAE's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RP,29,603843,-7 KGC,28,447018,3 PNR,29,391097,3 MORN,13,235862,-8 Average,24.75,419455,-2.25 [/table]
As you can see these stocks had an average of 24.75 hedge funds with bullish positions and the average amount invested in these stocks was $419 million. That figure was $710 million in HAE's case. RealPage, Inc. (NASDAQ:RP) is the most popular stock in this table. On the other hand Morningstar, Inc. (NASDAQ:MORN) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Haemonetics Corporation (NYSE:HAE) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th and still beat the market by 15.5 percentage points. Unfortunately HAE wasn't nearly as popular as these 10 stocks and hedge funds that were betting on HAE were disappointed as the stock returned -10.1% during the second quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
