The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31 holdings, data that is available nowhere else. Should you consider ABIOMED, Inc. (NASDAQ:ABMD) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Is ABIOMED, Inc. (NASDAQ:ABMD) a buy right now? Investors who are in the know are betting on the stock. The number of long hedge fund positions moved up by 2 lately. Our calculations also showed that abmd isn't among the 30 most popular stocks among hedge funds.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Let's take a gander at the recent hedge fund action encompassing ABIOMED, Inc. (NASDAQ:ABMD).
Hedge fund activity in ABIOMED, Inc. (NASDAQ:ABMD)
At Q1's end, a total of 33 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from the fourth quarter of 2018. On the other hand, there were a total of 20 hedge funds with a bullish position in ABMD 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.
Among these funds, Renaissance Technologies held the most valuable stake in ABIOMED, Inc. (NASDAQ:ABMD), which was worth $588.6 million at the end of the first quarter. On the second spot was Palo Alto Investors which amassed $199.5 million worth of shares. Moreover, AQR Capital Management, Citadel Investment Group, and Two Sigma Advisors were also bullish on ABIOMED, Inc. (NASDAQ:ABMD), allocating a large percentage of their portfolios to this stock.
Consequently, specific money managers were leading the bulls' herd. Point72 Asset Management, managed by Steve Cohen, initiated the most outsized position in ABIOMED, Inc. (NASDAQ:ABMD). Point72 Asset Management had $8.5 million invested in the company at the end of the quarter. Paul Tudor Jones's Tudor Investment Corp also made a $4.3 million investment in the stock during the quarter. The following funds were also among the new ABMD investors: Michael Gelband's ExodusPoint Capital, Joel Greenblatt's Gotham Asset Management, and Adam Usdan's Trellus Management Company.
Let's go over hedge fund activity in other stocks similar to ABIOMED, Inc. (NASDAQ:ABMD). We will take a look at Varian Medical Systems, Inc. (NYSE:VAR), Vornado Realty Trust (NYSE:VNO), Wynn Resorts, Limited (NASDAQ:WYNN), and Tiffany & Co. (NYSE:TIF). This group of stocks' market values are similar to ABMD's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VAR,32,980134,2 VNO,30,474922,7 WYNN,44,2204934,-2 TIF,30,1663436,0 Average,34,1330857,1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 34 hedge funds with bullish positions and the average amount invested in these stocks was $1331 million. That figure was $1189 million in ABMD's case. Wynn Resorts, Limited (NASDAQ:WYNN) is the most popular stock in this table. On the other hand Vornado Realty Trust (NYSE:VNO) is the least popular one with only 30 bullish hedge fund positions. ABIOMED, Inc. (NASDAQ:ABMD) is not the least popular stock in this group but hedge fund interest is still below average. 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 20 most popular stocks among hedge funds returned 1.9% in Q2 through May 30th and outperformed the S&P 500 ETF (SPY) by more than 3 percentage points. Unfortunately ABMD wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ABMD investors were disappointed as the stock returned -6.7% 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 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.