Is NVST Stock A Buy or Sell?

Reymerlyn Martin
·6 min read

The Insider Monkey team has completed processing the quarterly 13F filings for the December quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Envista Holdings Corporation (NYSE:NVST).

Is NVST stock a buy? The smart money was getting more bullish. The number of long hedge fund bets inched up by 13 lately. Envista Holdings Corporation (NYSE:NVST) was in 33 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 42. Our calculations also showed that NVST isn't among the 30 most popular stocks among hedge funds (click for Q4 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 197% since March 2017 and outperformed the S&P 500 ETFs by more than 124 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Phill Gross Adage Capital Phillip Gross
Phill Gross Adage Capital Phillip Gross

Phillip Gross of Adage Capital

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this psychedelic-drug startup. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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 website. Now we're going to go over the key hedge fund action surrounding Envista Holdings Corporation (NYSE:NVST).

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

At fourth quarter's end, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 65% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards NVST over the last 22 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Ariel Investments held the most valuable stake in Envista Holdings Corporation (NYSE:NVST), which was worth $238.7 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $101.2 million worth of shares. Paradice Investment Management, Millennium Management, and Balyasny 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 Paradice Investment Management allocated the biggest weight to Envista Holdings Corporation (NYSE:NVST), around 5.23% of its 13F portfolio. Iron Triangle Partners is also relatively very bullish on the stock, setting aside 3.94 percent of its 13F equity portfolio to NVST.

As industrywide interest jumped, specific money managers were breaking ground themselves. Healthcor Management LP, managed by Arthur B Cohen and Joseph Healey, created the most valuable position in Envista Holdings Corporation (NYSE:NVST). Healthcor Management LP had $35.1 million invested in the company at the end of the quarter. Kamran Moghtaderi's Eversept Partners also initiated a $29.1 million position during the quarter. The other funds with brand new NVST positions are Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Phill Gross and Robert Atchinson's Adage Capital Management, and Frank Fu's CaaS Capital.

Let's now take a look at hedge fund activity in other stocks similar to Envista Holdings Corporation (NYSE:NVST). We will take a look at Enel Chile S.A. (NYSE:ENIC), Coty Inc (NYSE:COTY), TriNet Group Inc (NYSE:TNET), Healthequity Inc (NASDAQ:HQY), CoreSite Realty Corp (NYSE:COR), APA Corporation (NASDAQ:APA), and Ollie's Bargain Outlet Holdings Inc (NASDAQ:OLLI). This group of stocks' market values resemble NVST's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ENIC,7,22302,3 COTY,22,316463,-4 TNET,21,438322,-5 HQY,20,241668,-4 COR,14,213827,-5 APA,35,371124,-7 OLLI,21,193713,-13 Average,20,256774,-5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $257 million. That figure was $801 million in NVST's case. APA Corporation (NASDAQ:APA) is the most popular stock in this table. On the other hand Enel Chile S.A. (NYSE:ENIC) is the least popular one with only 7 bullish hedge fund positions. Envista Holdings Corporation (NYSE:NVST) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NVST is 80. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7.9% in 2021 through April 1st and still beat the market by 0.4 percentage points. Hedge funds were also right about betting on NVST as the stock returned 21% since the end of Q4 (through 4/1) 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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