The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards AtriCure Inc. (NASDAQ:ATRC).
Is ATRC a good stock to buy now? AtriCure Inc. (NASDAQ:ATRC) shareholders have witnessed a decrease in enthusiasm from smart money recently. AtriCure Inc. (NASDAQ:ATRC) was in 21 hedge funds' portfolios at the end of September. The all time high for this statistic is 25. Our calculations also showed that ATRC isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are a large number of signals stock market investors use to size up publicly traded companies. A couple of the most under-the-radar signals are hedge fund and insider trading moves. Our researchers have shown that, historically, those who follow the top picks of the top money managers can outperform their index-focused peers by a healthy amount (see the details here).
Donald Sussman of Paloma Partners
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 fresh hedge fund action surrounding AtriCure Inc. (NASDAQ:ATRC).
Do Hedge Funds Think ATRC Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ATRC over the last 21 quarters. So, let's find out 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, Samuel Isaly's OrbiMed Advisors has the number one position in AtriCure Inc. (NASDAQ:ATRC), worth close to $49 million, comprising 0.6% of its total 13F portfolio. The second most bullish fund manager is Sectoral Asset Management, led by Jerome Pfund and Michael Sjostrom, holding a $28.3 million position; the fund has 2.4% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions encompass Efrem Kamen's Pura Vida Investments, Renaissance Technologies and Brian Ashford-Russell and Tim Woolley's Polar Capital. In terms of the portfolio weights assigned to each position Tamarack Capital Management allocated the biggest weight to AtriCure Inc. (NASDAQ:ATRC), around 4.3% of its 13F portfolio. Sectoral Asset Management is also relatively very bullish on the stock, earmarking 2.43 percent of its 13F equity portfolio to ATRC.
Seeing as AtriCure Inc. (NASDAQ:ATRC) has faced a decline in interest from hedge fund managers, we can see that there were a few funds that elected to cut their full holdings in the third quarter. At the top of the heap, John Overdeck and David Siegel's Two Sigma Advisors sold off the biggest position of all the hedgies followed by Insider Monkey, comprising an estimated $4.6 million in stock, and Michael Gelband's ExodusPoint Capital was right behind this move, as the fund sold off about $3.5 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds in the third quarter.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as AtriCure Inc. (NASDAQ:ATRC) but similarly valued. We will take a look at The Goodyear Tire & Rubber Company (NASDAQ:GT), Rush Enterprises, Inc. (NASDAQ:RUSHB), Easterly Government Properties Inc (NYSE:DEA), Hilton Grand Vacations Inc. (NYSE:HGV), B&G Foods, Inc. (NYSE:BGS), Dana Incorporated (NYSE:DAN), and Empire State Realty Trust Inc (NYSE:ESRT). All of these stocks' market caps are similar to ATRC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GT,24,166177,3 RUSHB,2,37287,-2 DEA,13,127817,-2 HGV,32,575867,2 BGS,15,37658,2 DAN,22,163106,-3 ESRT,17,161290,-2 Average,17.9,181315,-0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.9 hedge funds with bullish positions and the average amount invested in these stocks was $181 million. That figure was $224 million in ATRC's case. Hilton Grand Vacations Inc. (NYSE:HGV) is the most popular stock in this table. On the other hand Rush Enterprises, Inc. (NASDAQ:RUSHB) is the least popular one with only 2 bullish hedge fund positions. AtriCure Inc. (NASDAQ:ATRC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ATRC is 59.9. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on ATRC as the stock returned 20.6% since the end of Q3 (through 12/14) 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.