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Is ABIOMED, Inc. (NASDAQ:ABMD) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
ABIOMED, Inc. (NASDAQ:ABMD) investors should pay attention to an increase in enthusiasm from smart money in recent months. ABIOMED, Inc. (NASDAQ:ABMD) was in 26 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 35. There were 23 hedge funds in our database with ABMD holdings at the end of December. Our calculations also showed that ABMD isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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. Hedge funds have more than $3.5 trillion in assets under management, so you can't expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds' moves today.
Phillip Gross of Adage Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Now we're going to review the recent hedge fund action encompassing ABIOMED, Inc. (NASDAQ:ABMD).
Do Hedge Funds Think ABMD Is A Good Stock To Buy Now?
At Q1's end, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the previous quarter. On the other hand, there were a total of 27 hedge funds with a bullish position in ABMD 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 ABIOMED, Inc. (NASDAQ:ABMD) was held by Renaissance Technologies, which reported holding $567.4 million worth of stock at the end of December. It was followed by Palo Alto Investors with a $183.3 million position. Other investors bullish on the company included AQR Capital Management, Adage Capital Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Palo Alto Investors allocated the biggest weight to ABIOMED, Inc. (NASDAQ:ABMD), around 10.45% of its 13F portfolio. Rhenman & Partners Asset Management is also relatively very bullish on the stock, earmarking 1.73 percent of its 13F equity portfolio to ABMD.
Consequently, some big names were leading the bulls' herd. Balyasny Asset Management, managed by Dmitry Balyasny, established the most valuable position in ABIOMED, Inc. (NASDAQ:ABMD). Balyasny Asset Management had $24.7 million invested in the company at the end of the quarter. Michael Rockefeller and KarláKroeker's Woodline Partners also initiated a $10.2 million position during the quarter. The other funds with new positions in the stock are Frank Fu's CaaS Capital, Greg Eisner's Engineers Gate Manager, and Jinghua Yan's TwinBeech Capital.
Let's now take a look at hedge fund activity in other stocks similar to ABIOMED, Inc. (NASDAQ:ABMD). We will take a look at PerkinElmer, Inc. (NYSE:PKI), FMC Corporation (NYSE:FMC), Domino's Pizza, Inc. (NYSE:DPZ), Fair Isaac Corporation (NYSE:FICO), Equitable Holdings, Inc. (NYSE:EQH), argenx SE (NASDAQ:ARGX), and Agnico Eagle Mines Limited (NYSE:AEM). This group of stocks' market valuations are similar to ABMD's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PKI,33,1748962,2 FMC,32,499555,-13 DPZ,29,2176091,-8 FICO,27,1355293,-11 EQH,44,1699164,-2 ARGX,27,1375874,5 AEM,28,247180,-8 Average,31.4,1300303,-5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 31.4 hedge funds with bullish positions and the average amount invested in these stocks was $1300 million. That figure was $1003 million in ABMD's case. Equitable Holdings, Inc. (NYSE:EQH) is the most popular stock in this table. On the other hand Fair Isaac Corporation (NYSE:FICO) is the least popular one with only 27 bullish hedge fund positions. Compared to these stocks ABIOMED, Inc. (NASDAQ:ABMD) is even less popular than FICO. Our overall hedge fund sentiment score for ABMD is 30.3. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Hedge funds dodged a bullet by taking a bearish stance towards ABMD. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through July 9th but managed to beat the market again by 6.7 percentage points. Unfortunately ABMD wasn't nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); ABMD investors were disappointed as the stock returned 1.9% since the end of the first quarter (through 7/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.