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While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding SI-BONE, Inc. (NASDAQ:SIBN).
SI-BONE, Inc. (NASDAQ:SIBN) has seen a decrease in support from the world's most elite money managers of late. SI-BONE, Inc. (NASDAQ:SIBN) was in 26 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 30. There were 30 hedge funds in our database with SIBN holdings at the end of December. Our calculations also showed that SIBN isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
At the moment there are a multitude of formulas stock traders use to grade their holdings. Two of the most useful formulas are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the best picks of the best money managers can outclass the broader indices by a very impressive amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
Louis Bacon Moore of Moore 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 let's analyze the new hedge fund action regarding SI-BONE, Inc. (NASDAQ:SIBN).
Do Hedge Funds Think SIBN Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in SIBN over the last 23 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, OrbiMed Advisors was the largest shareholder of SI-BONE, Inc. (NASDAQ:SIBN), with a stake worth $41.5 million reported as of the end of March. Trailing OrbiMed Advisors was Driehaus Capital, which amassed a stake valued at $28.9 million. Holocene Advisors, Millennium Management, and Pura Vida Investments were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Tamarack Capital Management allocated the biggest weight to SI-BONE, Inc. (NASDAQ:SIBN), around 1.79% of its 13F portfolio. Intrinsic Edge Capital is also relatively very bullish on the stock, dishing out 0.81 percent of its 13F equity portfolio to SIBN.
Judging by the fact that SI-BONE, Inc. (NASDAQ:SIBN) has faced declining sentiment from the smart money, logic holds that there lies a certain "tier" of hedgies that elected to cut their positions entirely last quarter. Intriguingly, Principal Global Investors's Columbus Circle Investors sold off the largest position of the "upper crust" of funds followed by Insider Monkey, valued at about $8.1 million in stock, and Vishal Saluja and Pham Quang's Endurant Capital Management was right behind this move, as the fund dropped about $7.6 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 4 funds last quarter.
Let's now take a look at hedge fund activity in other stocks similar to SI-BONE, Inc. (NASDAQ:SIBN). We will take a look at Gol Linhas Aereas Inteligentes SA (NYSE:GOL), SilverCrest Metals Inc. (NYSE:SILV), PyroGenesis Canada Inc. (NASDAQ:PYR), Anavex Life Sciences Corp. (NASDAQ:AVXL), Curis, Inc. (NASDAQ:CRIS), John B. Sanfilippo & Son, Inc. (NASDAQ:JBSS), and Scholastic Corp (NASDAQ:SCHL). This group of stocks' market values match SIBN's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position GOL,10,23402,-2 SILV,10,104893,0 PYR,3,1788,3 AVXL,5,4833,0 CRIS,29,493218,1 JBSS,10,84672,0 SCHL,9,26175,-2 Average,10.9,105569,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.9 hedge funds with bullish positions and the average amount invested in these stocks was $106 million. That figure was $208 million in SIBN's case. Curis, Inc. (NASDAQ:CRIS) is the most popular stock in this table. On the other hand PyroGenesis Canada Inc. (NASDAQ:PYR) is the least popular one with only 3 bullish hedge fund positions. SI-BONE, Inc. (NASDAQ:SIBN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SIBN is 71.2. 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. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds 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 and beat the market again by 6.7 percentage points. Unfortunately SIBN wasn't nearly as popular as these 5 stocks and hedge funds that were betting on SIBN were disappointed as the stock returned -12.1% since the end of March (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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.