It seems that the masses and most of the financial media hate hedge funds and what they do, but why is this hatred of hedge funds so prominent? At the end of the day, these asset management firms do not gamble the hard-earned money of the people who are on the edge of poverty. Truth be told, most hedge fund managers and other smaller players within this industry are very smart and skilled investors. Of course, they may also make wrong bets in some instances, but no one knows what the future holds and how market participants will react to the bountiful news that floods in each day. The S&P 500 Index gained 7.6% in the 12 month-period that ended November 21, while less than 49% of its stocks beat the benchmark. In contrast, the 30 most popular mid-cap stocks among the top hedge fund investors tracked by the Insider Monkey team returned 18% over the same period, which provides evidence that these money managers do have great stock picking abilities. That’s why we believe it isn’t a waste of time to check out hedge fund sentiment before you invest in a stock like Glaukos Corp (NYSE:GKOS).
Glaukos Corp (NYSE:GKOS) investors should be aware of an increase in support from the world’s most elite money managers of late. GKOS was in 19 hedge funds’ portfolios at the end of the third quarter of 2016. There were 16 hedge funds in our database with GKOS holdings at the end of the previous quarter. 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 Orion Engineered Carbons SA (NYSE:OEC), Employers Holdings, Inc. (NYSE:EIG), and BancFirst Corporation (NASDAQ:BANF) to gather more data points.
Follow Glaukos Corp (NYSE:GKOS)
Follow Glaukos Corp (NYSE:GKOS)
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Monkey Business Images/Shutterstock.com
What have hedge funds been doing with Glaukos Corp (NYSE:GKOS)?
At Q3’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a 19% jump from the previous quarter. Hedge fund ownership has more than tripled in just three quarters as hedgies grow bullish on GKOS’ iStent. With hedgies’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, OrbiMed Advisors, managed by Samuel Isaly, holds the most valuable position in Glaukos Corp (NYSE:GKOS). OrbiMed Advisors has an $82.3 million position in the stock. On OrbiMed Advisors’ heels is Renaissance Technologies, led by Jim Simons, holding a $26.6 million position. Some other hedge funds and institutional investors that hold long positions contain James E. Flynn’s Deerfield Management, Ken Griffin’s Citadel Investment Group and John Overdeck and David Siegel’s Two Sigma Advisors.
With general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. HBK Investments, managed by David Costen Haley, created the most outsized position in Glaukos Corp (NYSE:GKOS). HBK Investments had $3.5 million invested in the company at the end of the quarter. Drew Cupps’ Cupps Capital Management also initiated a $2.5 million position during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Justin John Ferayorni’s Tamarack Capital Management, and Paul Tudor Jones’ Tudor Investment Corp.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Glaukos Corp (NYSE:GKOS) but similarly valued. We will take a look at Orion Engineered Carbons SA (NYSE:OEC), Employers Holdings, Inc. (NYSE:EIG), BancFirst Corporation (NASDAQ:BANF), and MBIA Inc. (NYSE:MBI). All of these stocks’ market caps are similar to GKOS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OEC | 12 | 121102 | -1 |
| EIG | 10 | 39100 | -2 |
| BANF | 8 | 14036 | 2 |
| MBI | 20 | 214365 | 1 |
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 $175 million in GKOS’ case. MBIA Inc. (NYSE:MBI) is the most popular stock in this table. On the other hand BancFirst Corporation (NASDAQ:BANF) is the least popular one with only 8 bullish hedge fund positions. Glaukos Corp (NYSE:GKOS) is not the most popular stock in this group but hedge fund interest is still above average and growing rapidly. This is a positive signal, as we’d rather spend our time researching stocks that hedge funds are piling on. In this regard GKOS might be a prime candidate to consider a long position in.
Disclosure: None
