Is The Beauty Health Company (NASDAQ:SKIN) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is The Beauty Health Company (NASDAQ:SKIN) worth your attention right now? Prominent investors were becoming more confident. The number of bullish hedge fund bets advanced by 39 recently. The Beauty Health Company (NASDAQ:SKIN) was in 39 hedge funds’ portfolios at the end of September. Our calculations also showed that SKIN isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind we’re going to take a glance at the key hedge fund action surrounding The Beauty Health Company (NASDAQ:SKIN).
Ian Wace of Marshall Wace
Do Hedge Funds Think SKIN Is A Good Stock To Buy Now?
At Q3’s end, a total of 39 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 39 from the previous quarter. By comparison, 0 hedge funds held shares or bullish call options in SKIN 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 publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Jeremy Green’s Redmile Group has the largest position in The Beauty Health Company (NASDAQ:SKIN) , worth close to $194.4 million, accounting for 3.4% of its total 13F portfolio. On Redmile Group’s heels is Marshall Wace LLP, managed by Paul Marshall and Ian Wace, which holds a $106.8 million position; the fund has 0.4% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish contain Christian Leone’s Luxor Capital Group, Richard Driehaus’s Driehaus Capital and Michael Rockefeller and KarláKroeker’s Woodline Partners. In terms of the portfolio weights assigned to each position One01 Capital allocated the biggest weight to The Beauty Health Company (NASDAQ:SKIN) , around 7.51% of its 13F portfolio. Tri Locum Partners is also relatively very bullish on the stock, dishing out 5.21 percent of its 13F equity portfolio to SKIN.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the largest position in The Beauty Health Company (NASDAQ:SKIN) . Marshall Wace LLP had $106.8 million invested in the company at the end of the quarter. Roberto Mignone’s Bridger Management also initiated a $19.5 million position during the quarter. The following funds were also among the new SKIN investors: James Woodson Davis’s Woodson Capital Management, Dennis Goldstein’s Rip Road Capital, and Prashanth Jayaram’s Tri Locum Partners.
Let’s now take a look at hedge fund activity in other stocks similar to The Beauty Health Company (NASDAQ:SKIN) . We will take a look at Parsons Corporation (NYSE:PSN), PotlatchDeltic Corporation (NASDAQ:PCH), Copa Holdings, S.A. (NYSE:CPA), CommVault Systems, Inc. (NASDAQ:CVLT), 3D Systems Corporation (NYSE:DDD), Acushnet Holdings Corp. (NYSE:GOLF), and Arconic Corporation (NYSE:ARNC). This group of stocks’ market caps match SKIN’s market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PSN,8,30497,-1 PCH,22,85997,-6 CPA,16,229501,2 CVLT,19,588850,-9 DDD,18,284758,-2 GOLF,20,64313,-1 ARNC,26,763617,-4 Average,18.4,292505,-3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.4 hedge funds with bullish positions and the average amount invested in these stocks was $293 million. That figure was $865 million in SKIN’s case. Arconic Corporation (NYSE:ARNC) is the most popular stock in this table. On the other hand Parsons Corporation (NYSE:PSN) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks The Beauty Health Company (NASDAQ:SKIN) is more popular among hedge funds. Our overall hedge fund sentiment score for SKIN is 90. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately SKIN wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SKIN were disappointed as the stock returned 0% since the end of the third quarter (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.