Hedge Fund Sentiment Is Stagnant On AmerisourceBergen Corporation (ABC)

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The Insider Monkey team has completed processing the quarterly 13F filings for the June 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 AmerisourceBergen Corporation (NYSE:ABC).

AmerisourceBergen Corporation (NYSE:ABC) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 43 hedge funds’ portfolios at the end of the second quarter of 2021. Our calculations also showed that ABC isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). At the end of this article we will also compare ABC to other stocks including Splunk Inc (NASDAQ:SPLK), Canon Inc. (NYSE:CAJ), and Fortive Corporation (NYSE:FTV) to get a better sense of its popularity.

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.

10 best stocks according to billionaire Larry Robbins

Larry Robbins of Glenview Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, artificial intelligence is one of the fastest-growing industries right now, so we are checking out stock pitches like this emerging AI 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. With all of this in mind let’s analyze the key hedge fund action encompassing AmerisourceBergen Corporation (NYSE:ABC).

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

At second quarter’s end, a total of 43 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the first quarter of 2020. On the other hand, there were a total of 40 hedge funds with a bullish position in ABC a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Glenview Capital, managed by Larry Robbins, holds the most valuable position in AmerisourceBergen Corporation (NYSE:ABC). Glenview Capital has a $196.8 million position in the stock, comprising 3.3% of its 13F portfolio. The second largest stake is held by Ken Griffin of Citadel Investment Group, with a $151.7 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions consist of Aaron Cowen’s Suvretta Capital Management, Cliff Asness’s AQR Capital Management and Jacob Mitchell’s Antipodes Partners. In terms of the portfolio weights assigned to each position Glenview Capital allocated the biggest weight to AmerisourceBergen Corporation (NYSE:ABC), around 3.3% of its 13F portfolio. Integral Health Asset Management is also relatively very bullish on the stock, dishing out 2.31 percent of its 13F equity portfolio to ABC.

Since AmerisourceBergen Corporation (NYSE:ABC) has witnessed declining sentiment from hedge fund managers, it’s safe to say that there exists a select few hedgies who sold off their full holdings last quarter. It’s worth mentioning that D. E. Shaw’s D E Shaw dumped the largest position of the “upper crust” of funds tracked by Insider Monkey, worth about $99.3 million in stock. Martin D. Sass’s fund, MD Sass, also dropped its stock, about $23.1 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s now review hedge fund activity in other stocks similar to AmerisourceBergen Corporation (NYSE:ABC). We will take a look at Splunk Inc (NASDAQ:SPLK), Canon Inc. (NYSE:CAJ), Fortive Corporation (NYSE:FTV), McCormick & Company, Incorporated (NYSE:MKC), Cerner Corporation (NASDAQ:CERN), United Microelectronics Corp (NYSE:UMC), and POSCO (NYSE:PKX). This group of stocks’ market valuations resemble ABC’s market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SPLK,47,1185992,6 CAJ,8,53729,-1 FTV,31,2235231,4 MKC,34,2032436,-1 CERN,38,1394559,-2 UMC,10,141218,-1 PKX,12,161569,0 Average,25.7,1029248,0.7 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.7 hedge funds with bullish positions and the average amount invested in these stocks was $1029 million. That figure was $1006 million in ABC’s case. Splunk Inc (NASDAQ:SPLK) is the most popular stock in this table. On the other hand Canon Inc. (NYSE:CAJ) is the least popular one with only 8 bullish hedge fund positions. AmerisourceBergen Corporation (NYSE:ABC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ABC is 77.3. 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 22.9% in 2021 through October 1st and still beat the market by 5.6 percentage points. Hedge funds were also right about betting on ABC as the stock returned 5% since the end of Q2 (through 10/1) 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.