We know that hedge funds generate strong, risk-adjusted returns over the long term. Therefore, emulating the picks on which they are collectively bullish can be a profitable strategy for retail investors. With billions of dollars in assets, smart investors must perform complex analysis, spend many resources, and use tools that are not always available to the general public. That’s not to say they don’t have occasional colossal losses; they do (like Melvin Capital’s recent GameStop losses). However, it is always a good idea to keep an eye on hedge fund activity. With that in mind, as the current round of 13F filings just ended, let’s take a look at the smart money sentiment towards West Pharmaceutical Services Inc. (NYSE: WST).
West Pharmaceutical Services Inc. (NYSE: WST) was listed in 31 hedge fund portfolios at the end of June. The all-time high for this statistic is 41. WST has seen an increase in enthusiasm for smart money recently. There were 26 hedge funds in our database with WST holdings at the end of March. Our calculations also showed that WST is not among the top 30 most popular stocks among hedge funds (click for Q2 rank).
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Ken Fisher of Fisher Asset Management
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Do hedge funds think WST is a good stock to buy now?
At the end of the second quarter, a total of 31 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 19% from the first quarter of 2020. By comparison, 27 hedge funds held stocks or bullish call options. in WST a year ago. With hedge fund positions undergoing their usual ebb and flow, there is a “top tier” of outstanding hedge fund managers who were significantly increasing their stakes (or already accumulating large positions).
Of these funds, Arrowstreet Capital held the largest stake in West Pharmaceutical Services Inc. (NYSE: WST), which stood at $ 130 million at the end of the second quarter. In second place was Fisher Asset Management which raised $ 103.3 million in stocks. Intermede Investment Partners, Marshall Wace LLP and AQR Capital Management were also very attached to the stock, becoming one of the largest hedge fund holders in the company. In terms of the portfolio weights assigned to each position, Intermede Investment Partners assigned the largest weight to West Pharmaceutical Services Inc. (NYSE: WST), approximately 1.82% of its 13F portfolio. Navellier & Associates is also relatively very bullish on the stock, setting aside 1.23% of its 13F equity portfolio at WST.
Now, some big names have jumped head first into West Pharmaceutical Services Inc. (NYSE: WST). Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the largest position in West Pharmaceutical Services Inc. (NYSE: WST). Marshall Wace LLP had $ 55.8 million invested in the company at the end of the quarter. Ken Griffin’s investment group Citadel also invested $ 9.9 million in the stock during the quarter. Other funds with brand new WST positions are Ben Levine, Andrew Manuel and LMR Partners of Stefan Renold, Echo Street Capital Management of Greg Poole and Centiva Capital of Karim Abbadi and Edward McBride.
Now let’s review hedge fund activity in other stocks similar to West Pharmaceutical Services Inc. (NYSE: WST). These stocks are RingCentral Inc (NYSE: RNG), Carnival Corporation & plc (NYSE: CUK), Futu Holdings Limited (NASDAQ: FUTU), Tencent Music Entertainment Group (NYSE: TME), Etsy Inc (NASDAQ: ETSY), Generac Holdings Inc. (NYSE: GNRC) and Slack Technologies Inc (NYSE: WORK). All market capitalizations of these stocks correspond to the market capitalization of WST.[table] Ticker, number of HF with positions, total value of HF positions (x1000), change of position HF RNG, 47.3285023, -4 CUK, 10.236979.6 FUTU, 31.11190137.5 TME, 35.570093, – 28 ETSY, 47,1731703, -6 GNRC, 38.594282,2 WORK, 61.5328202.1 Average, 38.4,1848060, -3.4 [/table]
Check the table here if you have formatting issues.
As you can see, these stocks had an average of 38.4 hedge funds with bullish positions and the average amount invested in these stocks was $ 1,848 million. That figure was $ 563 million in the case of WST. Slack Technologies Inc (NYSE: WORK) is the most popular stock in this table. On the other hand, Carnival Corporation & plc (NYSE: CUK) is the least popular with only 10 bullish hedge fund positions. West Pharmaceutical Services Inc. (NYSE: WST) isn’t the least popular stock in this group, but hedge fund interest is still below average. Our overall hedge fund sentiment score for WST is 53.3. Stocks with a 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 the 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 24.9% in 2021 through October 15 and have consistently beaten the market by 4.5 percentage points. A small number of hedge funds were also right to bet on the WST, as the stock has returned 12.8% since the end of the second quarter (through 10/15) and outperformed the market by an even larger margin. .
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Disclosure: none. This article originally appeared on Insider Monkey.