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Is Glaukos Corporation (NYSE:GKOS) 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.
Glaukos Corporation (NYSE:GKOS) investors should pay attention to an increase in hedge fund interest in recent months. Glaukos Corporation (NYSE:GKOS) was in 18 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 21. There were 13 hedge funds in our database with GKOS positions at the end of the fourth quarter. Our calculations also showed that GKOS isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 take a peek at the key hedge fund action regarding Glaukos Corporation (NYSE:GKOS).
Do Hedge Funds Think GKOS Is A Good Stock To Buy Now?
At Q1's end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 38% from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in GKOS a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
According to Insider Monkey's hedge fund database, Ken Griffin's Citadel Investment Group has the biggest position in Glaukos Corporation (NYSE:GKOS), worth close to $16.8 million, amounting to less than 0.1%% of its total 13F portfolio. Coming in second is GLG Partners, managed by Noam Gottesman, which holds a $8.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other members of the smart money that hold long positions encompass Efrem Kamen's Pura Vida Investments, Peter Muller's PDT Partners and Henrik Rhenman's Rhenman & Partners Asset Management. In terms of the portfolio weights assigned to each position Weld Capital Management allocated the biggest weight to Glaukos Corporation (NYSE:GKOS), around 0.31% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, setting aside 0.29 percent of its 13F equity portfolio to GKOS.
As industrywide interest jumped, key money managers were breaking ground themselves. Renaissance Technologies, assembled the most valuable position in Glaukos Corporation (NYSE:GKOS). Renaissance Technologies had $1.3 million invested in the company at the end of the quarter. Qing Li's Sciencast Management also made a $0.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Minhua Zhang's Weld Capital Management, Dmitry Balyasny's Balyasny Asset Management, and Mika Toikka's AlphaCrest Capital Management.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Glaukos Corporation (NYSE:GKOS) but similarly valued. These stocks are Spire Inc. (NYSE:SR), New Jersey Resources Corp (NYSE:NJR), Legend Biotech Corporation (NASDAQ:LEGN), Red Rock Resorts, Inc. (NASDAQ:RRR), 360 DigiTech, Inc. (NASDAQ:QFIN), Asbury Automotive Group, Inc. (NYSE:ABG), and Array Biopharma Inc (NASDAQ:ARRY). All of these stocks' market caps match GKOS's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SR,9,20905,-6 NJR,12,26762,-1 LEGN,12,315484,-1 RRR,28,607053,2 QFIN,19,91928,5 ABG,20,903147,-3 ARRY,30,486103,1 Average,18.6,350197,-0.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.6 hedge funds with bullish positions and the average amount invested in these stocks was $350 million. That figure was $47 million in GKOS's case. Array Biopharma Inc (NASDAQ:ARRY) is the most popular stock in this table. On the other hand Spire Inc. (NYSE:SR) is the least popular one with only 9 bullish hedge fund positions. Glaukos Corporation (NYSE:GKOS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GKOS is 57.1. 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 negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. 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 28.5% in 2021 through July 23rd and surpassed the market again by 10.1 percentage points. Unfortunately GKOS wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); GKOS investors were disappointed as the stock returned -40.5% since the end of March (through 7/23) 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 in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.