Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow over 700 of the best-performing investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is STAAR Surgical Company (NASDAQ:STAA), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is STAAR Surgical Company (NASDAQ:STAA) a buy here? Money managers are taking an optimistic view. The number of bullish hedge fund bets inched up by 9 recently. Our calculations also showed that STAA isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to take a look at the latest hedge fund action surrounding STAAR Surgical Company (NASDAQ:STAA).
How are hedge funds trading STAAR Surgical Company (NASDAQ:STAA)?
At the end of the third quarter, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 60% from one quarter earlier. On the other hand, there were a total of 13 hedge funds with a bullish position in STAA at the beginning of this year. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
More specifically, Broadwood Capital was the largest shareholder of STAAR Surgical Company (NASDAQ:STAA), with a stake worth $521 million reported as of the end of September. Trailing Broadwood Capital was Palo Alto Investors, which amassed a stake valued at $169 million. Renaissance Technologies, Millennium Management, and Two Sigma Advisors were also very fond of the stock, giving the stock large weights in their portfolios.
Consequently, some big names have jumped into STAAR Surgical Company (NASDAQ:STAA) headfirst. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, assembled the most outsized position in STAAR Surgical Company (NASDAQ:STAA). Marshall Wace LLP had $8.6 million invested in the company at the end of the quarter. David Costen Haley’s HBK Investments also initiated a $5.2 million position during the quarter. The following funds were also among the new STAA investors: Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group, and Noam Gottesman’s GLG Partners.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as STAAR Surgical Company (NASDAQ:STAA) but similarly valued. We will take a look at The Children’s Place Inc. (NASDAQ:PLCE), CNOOC Limited (NYSE:CEO), Comfort Systems USA, Inc. (NYSE:FIX), and CRISPR Therapeutics AG (NASDAQ:CRSP). All of these stocks’ market caps are closest to STAA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PLCE | 23 | 390120 | -2 |
| CEO | 15 | 365182 | 2 |
| FIX | 22 | 207509 | 2 |
| CRSP | 16 | 172273 | -1 |
| Average | 19 | 283771 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $284 million. That figure was $854 million in STAA’s case. The Children’s Place Inc. (NASDAQ:PLCE) is the most popular stock in this table. On the other hand CNOOC Limited (NYSE:CEO) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks STAAR Surgical Company (NASDAQ:STAA) 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. This article was originally published at Insider Monkey.
