The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 28. 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 Axonics Modulation Technologies, Inc. (NASDAQ:AXNX).
Axonics Modulation Technologies, Inc. (NASDAQ:AXNX) has seen an increase in enthusiasm from smart money in recent months. AXNX was in 12 hedge funds' portfolios at the end of the second quarter of 2019. There were 10 hedge funds in our database with AXNX holdings at the end of the previous quarter. Our calculations also showed that AXNX isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let's take a glance at the new hedge fund action encompassing Axonics Modulation Technologies, Inc. (NASDAQ:AXNX).
How are hedge funds trading Axonics Modulation Technologies, Inc. (NASDAQ:AXNX)?
At the end of the second quarter, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the first quarter of 2019. Below, you can check out the change in hedge fund sentiment towards AXNX over the last 16 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Axonics Modulation Technologies, Inc. (NASDAQ:AXNX) was held by Cormorant Asset Management, which reported holding $51.3 million worth of stock at the end of March. It was followed by Redmile Group with a $33.3 million position. Other investors bullish on the company included Rock Springs Capital Management, Perceptive Advisors, and Millennium Management.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Partner Fund Management, managed by Christopher James, established the biggest position in Axonics Modulation Technologies, Inc. (NASDAQ:AXNX). Partner Fund Management had $4.4 million invested in the company at the end of the quarter. Efrem Kamen's Pura Vida Investments also initiated a $2.7 million position during the quarter. The following funds were also among the new AXNX investors: Michael Gelband's ExodusPoint Capital, Efrem Kamen's Pura Vida Investments, and Dmitry Balyasny's Balyasny Asset Management.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as Axonics Modulation Technologies, Inc. (NASDAQ:AXNX) but similarly valued. These stocks are Talend S.A. (NASDAQ:TLND), Apogee Enterprises, Inc. (NASDAQ:APOG), Compass Diversified Holdings LLC (NYSE:CODI), and Radware Ltd. (NASDAQ:RDWR). This group of stocks' market caps match AXNX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TLND,24,367341,-8 APOG,12,140632,1 CODI,5,7883,1 RDWR,16,316267,-1 Average,14.25,208031,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $208 million. That figure was $133 million in AXNX's case. Talend S.A. (NASDAQ:TLND) is the most popular stock in this table. On the other hand Compass Diversified Holdings LLC (NYSE:CODI) is the least popular one with only 5 bullish hedge fund positions. Axonics Modulation Technologies, Inc. (NASDAQ:AXNX) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately AXNX wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); AXNX investors were disappointed as the stock returned -34.3% during the third quarter 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 many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.