At Insider Monkey, we pore over the filings of nearly 867 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30th. In this article, we will use that wealth of knowledge to determine whether or not Masimo Corporation (NASDAQ:MASI) makes for a good investment right now.
Is Masimo Corporation (NASDAQ:MASI) ready to rally soon? Prominent investors were in a bullish mood. The number of long hedge fund bets improved by 3 recently. Masimo Corporation (NASDAQ:MASI) was in 31 hedge funds’ portfolios at the end of September. The all time high for this statistic is 35. Our calculations also showed that MASI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s take a gander at the fresh hedge fund action surrounding Masimo Corporation (NASDAQ:MASI).
Kamran Moghtaderi of Eversept Partners
Do Hedge Funds Think MASI Is A Good Stock To Buy Now?
At third quarter’s end, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards MASI over the last 25 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
More specifically, D1 Capital Partners was the largest shareholder of Masimo Corporation (NASDAQ:MASI), with a stake worth $148.2 million reported as of the end of September. Trailing D1 Capital Partners was Fundsmith LLP, which amassed a stake valued at $117.8 million. Arrowstreet Capital, Blue Whale Capital, and Alyeska Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Blue Whale Capital allocated the biggest weight to Masimo Corporation (NASDAQ:MASI), around 3.8% of its 13F portfolio. Montanaro Asset Management is also relatively very bullish on the stock, setting aside 3.36 percent of its 13F equity portfolio to MASI.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. D1 Capital Partners, managed by Daniel Sundheim, established the most outsized position in Masimo Corporation (NASDAQ:MASI). D1 Capital Partners had $148.2 million invested in the company at the end of the quarter. Kamran Moghtaderi’s Eversept Partners also initiated a $18.1 million position during the quarter. The following funds were also among the new MASI investors: Peter Muller’s PDT Partners, David Harding’s Winton Capital Management, and Ronald Hua’s Qtron Investments.
Let’s now take a look at hedge fund activity in other stocks similar to Masimo Corporation (NASDAQ:MASI). We will take a look at Logitech International SA (NASDAQ:LOGI), FactSet Research Systems Inc. (NYSE:FDS), Huazhu Group Limited (NASDAQ:HTHT), Camden Property Trust (NYSE:CPT), LKQ Corporation (NASDAQ:LKQ), ABIOMED, Inc. (NASDAQ:ABMD), and KANZHUN LIMITED (NASDAQ:BZ). This group of stocks’ market caps resemble MASI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LOGI | 20 | 400160 | 0 |
| FDS | 28 | 775126 | 0 |
| HTHT | 28 | 775810 | 1 |
| CPT | 23 | 419856 | 2 |
| LKQ | 38 | 1694705 | 3 |
| ABMD | 25 | 921097 | 1 |
| BZ | 18 | 1170974 | -8 |
| Average | 25.7 | 879675 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.7 hedge funds with bullish positions and the average amount invested in these stocks was $880 million. That figure was $560 million in MASI’s case. LKQ Corporation (NASDAQ:LKQ) is the most popular stock in this table. On the other hand KANZHUN LIMITED (NASDAQ:BZ) is the least popular one with only 18 bullish hedge fund positions. Masimo Corporation (NASDAQ:MASI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MASI is 67.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately MASI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MASI were disappointed as the stock returned 2.7% since the end of September (through 11/30) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Masimo Corp (NASDAQ:MASI)
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Disclosure: None. This article was originally published at Insider Monkey.
