After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards OptiNose, Inc. (NASDAQ:OPTN).
Is OptiNose, Inc. (NASDAQ:OPTN) undervalued? Hedge funds are getting more optimistic. The number of bullish hedge fund positions increased by 2 in recent months. Our calculations also showed that OPTN isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
[caption id="attachment_26340" align="aligncenter" width="594"] Ken Griffin of Citadel Investment Group[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. Let's review the fresh hedge fund action regarding OptiNose, Inc. (NASDAQ:OPTN).
What does smart money think about OptiNose, Inc. (NASDAQ:OPTN)?
At Q3's end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the previous quarter. On the other hand, there were a total of 6 hedge funds with a bullish position in OPTN a year ago. 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 OptiNose, Inc. (NASDAQ:OPTN) was held by Tamarack Capital Management, which reported holding $4.7 million worth of stock at the end of September. It was followed by Wildcat Capital Management with a $3.6 million position. Other investors bullish on the company included GMT Capital, Citadel Investment Group, and Eversept Partners. In terms of the portfolio weights assigned to each position Wildcat Capital Management allocated the biggest weight to OptiNose, Inc. (NASDAQ:OPTN), around 1.54% of its 13F portfolio. Tamarack Capital Management is also relatively very bullish on the stock, setting aside 1.23 percent of its 13F equity portfolio to OPTN.
As aggregate interest increased, some big names have been driving this bullishness. Tamarack Capital Management, managed by Justin John Ferayorni, created the most valuable position in OptiNose, Inc. (NASDAQ:OPTN). Tamarack Capital Management had $4.7 million invested in the company at the end of the quarter. Leonard A. Potter's Wildcat Capital Management also initiated a $3.6 million position during the quarter. The following funds were also among the new OPTN investors: Renaissance Technologies and Michael Gelband's ExodusPoint Capital.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as OptiNose, Inc. (NASDAQ:OPTN) but similarly valued. These stocks are Tetraphase Pharmaceuticals Inc (NASDAQ:TTPH), Drive Shack Inc. (NYSE:DS), NeoPhotonics Corp (NYSE:NPTN), and UFP Technologies, Inc. (NASDAQ:UFPT). All of these stocks' market caps resemble OPTN's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TTPH,2,934,-7 DS,5,5852,-3 NPTN,20,52277,3 UFPT,10,47314,0 Average,9.25,26594,-1.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $12 million in OPTN's case. NeoPhotonics Corp (NYSE:NPTN) is the most popular stock in this table. On the other hand Tetraphase Pharmaceuticals Inc (NASDAQ:TTPH) is the least popular one with only 2 bullish hedge fund positions. OptiNose, Inc. (NASDAQ:OPTN) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on OPTN as the stock returned 33.4% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.