A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended December 31st, so let’s proceed with the discussion of the hedge fund sentiment on Teva Pharmaceutical Industries Limited (NYSE:TEVA).
Is TEVA stock a buy? Teva Pharmaceutical Industries Limited (NYSE:TEVA) investors should be aware of a decrease in activity from the world's largest hedge funds recently. Teva Pharmaceutical Industries Limited (NYSE:TEVA) was in 26 hedge funds' portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 81. There were 33 hedge funds in our database with TEVA holdings at the end of September. Our calculations also showed that TEVA isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings).
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David Abrams of Abrams Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. 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. Keeping this in mind let's take a peek at the key hedge fund action encompassing Teva Pharmaceutical Industries Limited (NYSE:TEVA).
Do Hedge Funds Think TEVA Is A Good Stock To Buy Now?
Heading into the first quarter of 2021, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of -21% from the third quarter of 2020. Below, you can check out the change in hedge fund sentiment towards TEVA over the last 22 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Berkshire Hathaway, managed by Warren Buffett, holds the most valuable position in Teva Pharmaceutical Industries Limited (NYSE:TEVA). Berkshire Hathaway has a $412.9 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Abrams Capital Management, led by David Abrams, holding a $232 million position; the fund has 6.5% of its 13F portfolio invested in the stock. Other professional money managers that are bullish include Bill Miller's Miller Value Partners, Stephen DuBois's Camber Capital Management and Kamran Moghtaderi's Eversept Partners. In terms of the portfolio weights assigned to each position Abrams Capital Management allocated the biggest weight to Teva Pharmaceutical Industries Limited (NYSE:TEVA), around 6.54% of its 13F portfolio. HealthInvest Partners AB is also relatively very bullish on the stock, designating 5.85 percent of its 13F equity portfolio to TEVA.
Because Teva Pharmaceutical Industries Limited (NYSE:TEVA) has faced bearish sentiment from the smart money, we can see that there lies a certain "tier" of hedge funds that decided to sell off their positions entirely in the fourth quarter. Interestingly, George Soros's Soros Fund Management said goodbye to the biggest position of all the hedgies watched by Insider Monkey, comprising an estimated $14.4 million in stock, and Renaissance Technologies was right behind this move, as the fund sold off about $10.3 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 7 funds in the fourth quarter.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Teva Pharmaceutical Industries Limited (NYSE:TEVA) but similarly valued. We will take a look at Cna Financial Corporation (NYSE:CNA), News Corp (NASDAQ:NWS), Lennox International Inc. (NYSE:LII), Repligen Corporation (NASDAQ:RGEN), First Solar, Inc. (NASDAQ:FSLR), Bright Horizons Family Solutions Inc (NYSE:BFAM), and Westlake Chemical Corporation (NYSE:WLK). This group of stocks' market values resemble TEVA's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CNA,16,60793,-1 NWS,11,65562,-3 LII,27,353035,-7 RGEN,37,1330745,2 FSLR,34,406430,-6 BFAM,20,308229,-6 WLK,22,158454,-4 Average,23.9,383321,-3.6 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.9 hedge funds with bullish positions and the average amount invested in these stocks was $383 million. That figure was $916 million in TEVA's case. Repligen Corporation (NASDAQ:RGEN) is the most popular stock in this table. On the other hand News Corp (NASDAQ:NWS) is the least popular one with only 11 bullish hedge fund positions. Teva Pharmaceutical Industries Limited (NYSE:TEVA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TEVA is 36.5. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. 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 beat the market again by 0.9 percentage points. Unfortunately TEVA wasn't nearly as popular as these 30 stocks and hedge funds that were betting on TEVA were disappointed as the stock returned 6.5% since the end of December (through 4/19) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.