Hedge Funds Are Buying AtriCure Inc. (ATRC)
We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of AtriCure Inc. (NASDAQ:ATRC) based on that data.
AtriCure Inc. (NASDAQ:ATRC) investors should pay attention to an increase in enthusiasm from smart money recently. ATRC was in 20 hedge funds' portfolios at the end of the first quarter of 2020. There were 18 hedge funds in our database with ATRC positions at the end of the previous quarter. Our calculations also showed that ATRC isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
If you'd ask most stock holders, hedge funds are seen as underperforming, old investment vehicles of the past. While there are greater than 8000 funds in operation at present, We hone in on the leaders of this group, approximately 850 funds. These investment experts watch over the lion's share of all hedge funds' total capital, and by following their unrivaled equity investments, Insider Monkey has found numerous investment strategies that have historically beaten the broader indices. Insider Monkey's flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_341400" align="aligncenter" width="400"]
Samuel Isaly of OrbiMed Advisors[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let's take a look at the key hedge fund action regarding AtriCure Inc. (NASDAQ:ATRC).
What does smart money think about AtriCure Inc. (NASDAQ:ATRC)?
At the end of the first quarter, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards ATRC over the last 18 quarters. With hedgies' sentiment swirling, there exists a few notable hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
More specifically, OrbiMed Advisors was the largest shareholder of AtriCure Inc. (NASDAQ:ATRC), with a stake worth $31.2 million reported as of the end of September. Trailing OrbiMed Advisors was Adage Capital Management, which amassed a stake valued at $30.2 million. Tamarack Capital Management, Renaissance Technologies, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Tamarack Capital Management allocated the biggest weight to AtriCure Inc. (NASDAQ:ATRC), around 7.63% of its 13F portfolio. DAFNA Capital Management is also relatively very bullish on the stock, designating 3.36 percent of its 13F equity portfolio to ATRC.
As aggregate interest increased, some big names were breaking ground themselves. Adage Capital Management, managed by Phill Gross and Robert Atchinson, initiated the biggest position in AtriCure Inc. (NASDAQ:ATRC). Adage Capital Management had $30.2 million invested in the company at the end of the quarter. Efrem Kamen's Pura Vida Investments also made a $13.1 million investment in the stock during the quarter. The other funds with brand new ATRC positions are Joseph Edelman's Perceptive Advisors, Michael Gelband's ExodusPoint Capital, and Vishal Saluja and Pham Quang's Endurant Capital Management.
Let's also examine 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 Green Dot Corporation (NYSE:GDOT), Brooge Energy Limited (NASDAQ:BROG), American Eagle Outfitters Inc. (NYSE:AEO), and Corecivic Inc. (NYSE:CXW). This group of stocks' market caps match ATRC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GDOT,22,376626,-1 BROG,7,49414,4 AEO,26,133187,2 CXW,18,109733,-7 Average,18.25,167240,-0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.25 hedge funds with bullish positions and the average amount invested in these stocks was $167 million. That figure was $185 million in ATRC's case. American Eagle Outfitters Inc. (NYSE:AEO) is the most popular stock in this table. On the other hand Brooge Energy Limited (NASDAQ:BROG) is the least popular one with only 7 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 calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.2% in 2020 through June 17th but still beat the market by 14.8 percentage points. Hedge funds were also right about betting on ATRC as the stock returned 37.5% in Q2 (through June 17th) 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.
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