The financial regulations require hedge funds and wealthy investors that crossed the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on June 28th. We at Insider Monkey have made an extensive database of nearly 750 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Intersect ENT Inc (NASDAQ:XENT) based on those filings.
Is Intersect ENT Inc (NASDAQ:XENT) going to take off soon? Money managers are becoming less confident. The number of long hedge fund positions dropped by 8 in recent months. Our calculations also showed that XENT isn’t among the 30 most popular stocks among hedge funds (see the video below).
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 25.8% year to date (through May 30th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 40 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.
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s analyze the latest hedge fund action encompassing Intersect ENT Inc (NASDAQ:XENT).
What does smart money think about Intersect ENT Inc (NASDAQ:XENT)?
At the end of the second quarter, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of -35% from the previous quarter. The graph below displays the number of hedge funds with bullish position in XENT over the last 16 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Deerfield Management held the most valuable stake in Intersect ENT Inc (NASDAQ:XENT), which was worth $70.8 million at the end of the second quarter. On the second spot was Healthcor Management LP which amassed $63.2 million worth of shares. Moreover, Point72 Asset Management, Millennium Management, and Rock Springs Capital Management were also bullish on Intersect ENT Inc (NASDAQ:XENT), allocating a large percentage of their portfolios to this stock.
Because Intersect ENT Inc (NASDAQ:XENT) has witnessed a decline in interest from hedge fund managers, it’s safe to say that there lies a certain “tier” of fund managers who were dropping their full holdings heading into Q3. At the top of the heap, Kevin Kotler’s Broadfin Capital cut the biggest stake of all the hedgies monitored by Insider Monkey, valued at an estimated $8.5 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund dropped about $4.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 8 funds heading into Q3.
Let’s check out hedge fund activity in other stocks similar to Intersect ENT Inc (NASDAQ:XENT). These stocks are Hanmi Financial Corp (NASDAQ:HAFC), Myers Industries, Inc. (NYSE:MYE), Solaris Oilfield Infrastructure, Inc. (NYSE:SOI), and Laredo Petroleum Inc (NYSE:LPI). All of these stocks’ market caps match XENT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HAFC | 8 | 34892 | -4 |
| MYE | 14 | 112013 | 0 |
| SOI | 14 | 66032 | -2 |
| LPI | 14 | 176652 | -4 |
| Average | 12.5 | 97397 | -2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12.5 hedge funds with bullish positions and the average amount invested in these stocks was $97 million. That figure was $282 million in XENT’s case. Myers Industries, Inc. (NYSE:MYE) is the most popular stock in this table. On the other hand Hanmi Financial Corp (NASDAQ:HAFC) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Intersect ENT Inc (NASDAQ:XENT) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately XENT wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on XENT were disappointed as the stock returned -25.3% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market in Q3.
Disclosure: None. This article was originally published at Insider Monkey.
