Hansen Medical, Inc. (HNSN): Hedge Funds Are Snapping Up

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 Hansen Medical, Inc. (NASDAQ:HNSN), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Hansen Medical, Inc. (NASDAQ:HNSN)’s stock took a couple of terrible hits this year and lost over 55% in August alone. Due to its small size, the company is not very popular among the funds we track, but it still registered an increase in sentiment during the third quarter.  However, the level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity, but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Perceptron, Inc. (NASDAQ:PRCP), Northern Technologies International Corp (NASDAQ:NTIC), and Inuvo, Inc. (NYSEMKT:INUV) to gather more data points.

In the eyes of most shareholders, hedge funds are seen as underperforming, outdated financial tools of the past. While there are greater than 8000 funds in operation today, Our researchers look at the masters of this group, about 700 funds. These hedge fund managers shepherd most of the smart money’s total capital, and by following their top stock picks, Insider Monkey has come up with a few investment strategies that have historically outperformed the market. Insider Monkey’s small-cap hedge fund strategy exceeded the S&P 500 index by 12 percentage points annually for a decade in their back tests.

Keeping this in mind, we’re going to analyze the new action surrounding Hansen Medical, Inc. (NASDAQ:HNSN).

What have hedge funds been doing with Hansen Medical, Inc. (NASDAQ:HNSN)?

Heading into Q4, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 33% from the second quarter. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Matthew Strobeck’s Birchview Capital has the largest position in Hansen Medical, Inc. (NASDAQ:HNSN), worth close to $14.3 million, corresponding to 8.5% of its total 13F portfolio. Coming in second is Ryan Heslop and Ariel Warszawski’s Firefly Value Partners, with a $0.7 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions consist of Jim Tarantino and Chris Galvin’s Westerly Capital Management, Adam Usdan’s Trellus Management Company.

Now, some big names were leading the bulls’ herd. Firefly Value Partners established the most outsized position in Hansen Medical, Inc. (NASDAQ:HNSN). Firefly Value Partners had $0.7 million invested in the company at the end of the quarter.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Hansen Medical, Inc. (NASDAQ:HNSN) but similarly valued. These stocks are Perceptron, Inc. (NASDAQ:PRCP), Northern Technologies International Corp (NASDAQ:NTIC), Inuvo, Inc. (NYSEMKT:INUV), and TransAct Technologies Incorporated (NASDAQ:TACT). This group of stocks’ market valuations resemble HNSN’s market valuation.

As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $15 million in HNSN’s case. Perceptron, Inc. (NASDAQ:PRCP) is the most popular stock in this table while Northern Technologies International Corp (NASDAQ:NTIC) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Hansen Medical, Inc. (NASDAQ:HNSN) registered the same level as Northern Technologies. Considering that hedge funds aren’t very bullish on this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.