Were Hedge Funds Right About Piling Into IQVIA Holdings (IQV)?
In this article we are going to use hedge fund sentiment as a tool and determine whether IQVIA Holdings, Inc. (NYSE:IQV) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds' picks don't beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Is IQVIA Holdings, Inc. (NYSE:IQV) a buy right now? The smart money was becoming hopeful. The number of long hedge fund positions inched up by 5 in recent months. IQVIA Holdings, Inc. (NYSE:IQV) was in 69 hedge funds' portfolios at the end of December. The all time high for this statistic was previously 68. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that IQV isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings). There were 64 hedge funds in our database with IQV holdings at the end of September.
Michael Lowenstein of Kensico Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, auto parts business is a recession resistant business, so we are taking a closer look at this discount auto parts stock that is growing at a 196% annualized rate. We go through lists like the 15 best micro-cap stocks to buy now 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. With all of this in mind let's check out the latest hedge fund action encompassing IQVIA Holdings, Inc. (NYSE:IQV).
Do Hedge Funds Think IQV Is A Good Stock To Buy Now?
At the end of December, a total of 69 of the hedge funds tracked by Insider Monkey were long this stock, a change of 8% from one quarter earlier. By comparison, 64 hedge funds held shares or bullish call options in IQV a year ago. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in IQVIA Holdings, Inc. (NYSE:IQV) was held by Farallon Capital, which reported holding $724.5 million worth of stock at the end of December. It was followed by Steadfast Capital Management with a $418.4 million position. Other investors bullish on the company included Third Point, D E Shaw, and Kensico Capital. In terms of the portfolio weights assigned to each position RIT Capital Partners allocated the biggest weight to IQVIA Holdings, Inc. (NYSE:IQV), around 20.75% of its 13F portfolio. Cowbird Capital is also relatively very bullish on the stock, setting aside 9.7 percent of its 13F equity portfolio to IQV.
With a general bullishness amongst the heavyweights, some big names have jumped into IQVIA Holdings, Inc. (NYSE:IQV) headfirst. Point72 Asset Management, managed by Steve Cohen, created the most valuable position in IQVIA Holdings, Inc. (NYSE:IQV). Point72 Asset Management had $83.2 million invested in the company at the end of the quarter. Frank Fu's CaaS Capital also initiated a $30 million position during the quarter. The following funds were also among the new IQV investors: David Zorub's Parsifal Capital Management, Peter Galgay's Amitell Capital, and Jacob Doft's Highline Capital Management.
Let's go over hedge fund activity in other stocks similar to IQVIA Holdings, Inc. (NYSE:IQV). These stocks are T. Rowe Price Group, Inc. (NASDAQ:TROW), Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN), PPG Industries, Inc. (NYSE:PPG), RingCentral Inc (NYSE:RNG), Verisk Analytics, Inc. (NASDAQ:VRSK), Johnson Controls International plc (NYSE:JCI), and TransDigm Group Incorporated (NYSE:TDG). All of these stocks' market caps match IQV's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TROW,35,360876,1 ALXN,77,6025546,19 PPG,34,295422,-2 RNG,63,4401111,4 VRSK,32,1438418,-8 JCI,34,795050,10 TDG,64,6891017,0 Average,48.4,2886777,3.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 48.4 hedge funds with bullish positions and the average amount invested in these stocks was $2887 million. That figure was $3765 million in IQV's case. Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) is the most popular stock in this table. On the other hand Verisk Analytics, Inc. (NASDAQ:VRSK) is the least popular one with only 32 bullish hedge fund positions. IQVIA Holdings, Inc. (NYSE:IQV) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IQV is 81.1. 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 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 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Hedge funds were also right about betting on IQV as the stock returned 20.7% since the end of Q4 (through 4/19) 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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