Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small-cap stocks, especially when they are screened well, can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those elite funds in these small-cap stocks. In the following paragraphs, we analyze Nevro Corp (NYSE:NVRO) from the perspective of those elite funds.
Nevro Corp (NYSE:NVRO) has seen an increase in activity from the world’s largest hedge funds in recent months. NVRO was in 33 hedge funds’ portfolios at the end of the third quarter of 2016. There were 31 hedge funds in our database with NVRO holdings at the end of the prior quarter. At the end of this article we will also compare NVRO to other stocks including NetScout Systems, Inc. (NASDAQ:NTCT), G-III Apparel Group, Ltd. (NASDAQ:GIII), and Swift Transportation Co (NYSE:SWFT) to get a better sense of its popularity.
Follow Nevro Corp (NYSE:NVRO)
Follow Nevro Corp (NYSE:NVRO)
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What have hedge funds been doing with Nevro Corp (NYSE:NVRO)?
At Q3’s end, a total of 33 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 6% increase from the second quarter of 2016. It’s also the fourth straight quarterly filing period in which hedge fund sentiment for Nevro has increased. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Columbus Circle Investors, managed by Principal Global Investors, holds the largest position in Nevro Corp (NYSE:NVRO). Columbus Circle Investors has a $75.6 million position in the stock. On Columbus Circle Investors’ heels is Deerfield Management, led by James E. Flynn, holding a $56 million position. Some other peers that hold long positions include Bihua Chen’s Cormorant Asset Management, Israel Englander’s Millennium Management, and Ken Griffin’s Citadel Investment Group.
As one would reasonably expect, specific money managers have been driving this bullishness. Deerfield Management, managed by James E. Flynn, created the most outsized position in Nevro Corp (NYSE:NVRO). Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $6.6 million position during the quarter. The other funds with brand new NVRO positions are Warren Lammert’s Granite Point Capital, Citadel Investment Group, and Hal Mintz’s Sabby Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Nevro Corp (NYSE:NVRO), but similarly valued. We will take a look at NetScout Systems, Inc. (NASDAQ:NTCT), G-III Apparel Group, Ltd. (NASDAQ:GIII), Swift Transportation Co (NYSE:SWFT), and Press Ganey Holdings Inc (NYSE:PGND). This group of stocks’ market caps are closest to NVRO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NTCT | 20 | 331263 | -3 |
| GIII | 11 | 78336 | -1 |
| SWFT | 30 | 452388 | 0 |
| PGND | 18 | 137139 | 3 |
As you can see these stocks had an average of 19.75 hedge funds with bullish positions and the average amount invested in these stocks was $250 million. That figure was $391 million in NVRO’s case. Swift Transportation Co (NYSE:SWFT) is the most popular stock in this table. On the other hand G-III Apparel Group, Ltd. (NASDAQ:GIII) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Nevro Corp (NYSE:NVRO) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
