The government requires hedge funds and wealthy investors that crossed the $100 million equity holdings threshold are required to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on December 31. We at Insider Monkey have made an extensive database of nearly 750 of those elite funds and prominent investors' filings. In this article, we analyze how these elite funds and prominent investors traded AtriCure Inc. (NASDAQ:ATRC) based on those filings.
Hedge fund interest in AtriCure Inc. (NASDAQ:ATRC) shares was flat at the end of last quarter. This is usually a negative indicator. At the end of this article we will also compare ATRC to other stocks including Kinsale Capital Group, Inc. (NASDAQ:KNSL), TransAlta Corporation (NYSE:TAC), and IMAX Corporation (NYSE:IMAX) to get a better sense of its popularity.
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 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to take a look at the latest hedge fund action regarding AtriCure Inc. (NASDAQ:ATRC).
What have hedge funds been doing with AtriCure Inc. (NASDAQ:ATRC)?
Heading into the first quarter of 2019, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ATRC over the last 14 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, Hudson Executive Capital was the largest shareholder of AtriCure Inc. (NASDAQ:ATRC), with a stake worth $40.7 million reported as of the end of December. Trailing Hudson Executive Capital was Millennium Management, which amassed a stake valued at $26.9 million. Tamarack Capital Management, Sectoral Asset Management, and Royce & Associates were also very fond of the stock, giving the stock large weights in their portfolios.
Due to the fact that AtriCure Inc. (NASDAQ:ATRC) has witnessed falling interest from the smart money, it's safe to say that there is a sect of hedge funds who were dropping their entire stakes last quarter. At the top of the heap, Steve Cohen's Point72 Asset Management sold off the largest stake of the "upper crust" of funds followed by Insider Monkey, valued at close to $6.1 million in stock. Matthew Hulsizer's fund, PEAK6 Capital Management, also sold off its stock, about $0.6 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now take a look at hedge fund activity in other stocks similar to AtriCure Inc. (NASDAQ:ATRC). We will take a look at Kinsale Capital Group, Inc. (NASDAQ:KNSL), TransAlta Corporation (NYSE:TAC), IMAX Corporation (NYSE:IMAX), and Nevro Corp (NYSE:NVRO). This group of stocks' market values are closest to ATRC's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KNSL,12,19430,7 TAC,9,12805,0 IMAX,14,28137,0 NVRO,20,296016,-4 Average,13.75,89097,0.75 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.75 hedge funds with bullish positions and the average amount invested in these stocks was $89 million. That figure was $164 million in ATRC's case. Nevro Corp (NYSE:NVRO) is the most popular stock in this table. On the other hand TransAlta Corporation (NYSE:TAC) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks AtriCure Inc. (NASDAQ:ATRC) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately ATRC wasn't nearly as popular as these 15 stock and hedge funds that were betting on ATRC were disappointed as the stock returned -10.8% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.