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Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Senseonics Holdings, Inc. (NYSE:SENS).
Hedge fund interest in Senseonics Holdings, Inc. (NYSE:SENS) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Sharps Compliance Corp. (NASDAQ:SMED), Exicure, Inc. (NASDAQ:XCUR), and Community Financial Corp (NASDAQ:TCFC) to gather more data points. Our calculations also showed that SENS 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.
To the average investor there are plenty of methods stock traders put to use to assess their holdings. Two of the less known methods are hedge fund and insider trading indicators. Our researchers have shown that, historically, those who follow the best picks of the elite fund managers can outclass the S&P 500 by a solid margin (see the details here).
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Sander Gerber of Hudson Bay Capital[/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 stocks recommended/scorned by legendary Bill Miller. 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. Now let's take a look at the fresh hedge fund action encompassing Senseonics Holdings, Inc. (NYSE:SENS).
How are hedge funds trading Senseonics Holdings, Inc. (NYSE:SENS)?
Heading into the second quarter of 2020, a total of 7 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SENS over the last 18 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.
More specifically, Endurant Capital Management was the largest shareholder of Senseonics Holdings, Inc. (NYSE:SENS), with a stake worth $1.5 million reported as of the end of September. Trailing Endurant Capital Management was Masters Capital Management, which amassed a stake valued at $1.3 million. Millennium Management, Hudson Bay Capital Management, and Citadel Investment Group 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 Endurant Capital Management allocated the biggest weight to Senseonics Holdings, Inc. (NYSE:SENS), around 0.67% of its 13F portfolio. Masters Capital Management is also relatively very bullish on the stock, setting aside 0.15 percent of its 13F equity portfolio to SENS.
Seeing as Senseonics Holdings, Inc. (NYSE:SENS) has witnessed declining sentiment from the aggregate hedge fund industry, it's easy to see that there were a few hedge funds who sold off their positions entirely in the first quarter. Intriguingly, Noam Gottesman's GLG Partners cut the biggest investment of the 750 funds monitored by Insider Monkey, valued at close to $0.1 million in stock, and David Harding's Winton Capital Management was right behind this move, as the fund said goodbye to about $0 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Senseonics Holdings, Inc. (NYSE:SENS) but similarly valued. We will take a look at Sharps Compliance Corp. (NASDAQ:SMED), Exicure, Inc. (NASDAQ:XCUR), Community Financial Corp (NASDAQ:TCFC), and Saratoga Investment Corp (NYSE:SAR). This group of stocks' market valuations are closest to SENS's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SMED,5,8307,4 XCUR,11,26112,0 TCFC,3,15041,0 SAR,5,2482,-1 Average,6,12986,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. That figure was $3 million in SENS's case. Exicure, Inc. (NASDAQ:XCUR) is the most popular stock in this table. On the other hand Community Financial Corp (NASDAQ:TCFC) is the least popular one with only 3 bullish hedge fund positions. Senseonics Holdings, Inc. (NYSE:SENS) is not the most popular stock in this group but hedge fund interest is still above average. 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 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 13.9% in 2020 through June 10th but beat the market by 14.2 percentage points. Unfortunately SENS wasn't nearly as popular as these 10 stocks and hedge funds that were betting on SENS were disappointed as the stock returned -28.4% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.