Hedge Funds Are Buying Pulmonx Corporation (LUNG)

In this article we will check out the progression of hedge fund sentiment towards Pulmonx Corporation (NASDAQ:LUNG) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Pulmonx Corporation (NASDAQ:LUNG) has seen an increase in support from the world’s most elite money managers of late. Pulmonx Corporation (NASDAQ:LUNG) was in 22 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 27. There were 20 hedge funds in our database with LUNG holdings at the end of June. Our calculations also showed that LUNG isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 we’re going to go over the fresh hedge fund action encompassing Pulmonx Corporation (NASDAQ:LUNG).

James E. Flynn of Deerfield Management

Do Hedge Funds Think LUNG Is A Good Stock To Buy Now?

At third quarter’s end, a total of 22 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards LUNG over the last 25 quarters. So, let’s find 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 Pulmonx Corporation (NASDAQ:LUNG), which was worth $73 million at the end of the third quarter. On the second spot was Miura Global Management which amassed $38.1 million worth of shares. Pura Vida Investments, Rock Springs Capital Management, and Citadel 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 Miura Global Management allocated the biggest weight to Pulmonx Corporation (NASDAQ:LUNG), around 5.91% of its 13F portfolio. Deerfield Management is also relatively very bullish on the stock, dishing out 1.43 percent of its 13F equity portfolio to LUNG.

With a general bullishness amongst the heavyweights, some big names have jumped into Pulmonx Corporation (NASDAQ:LUNG) headfirst. Bridgewater Associates, managed by Ray Dalio, created the most valuable position in Pulmonx Corporation (NASDAQ:LUNG). Bridgewater Associates had $1.1 million invested in the company at the end of the quarter. Mark Wolfson and Jamie Alexander’s Jasper Ridge Partners also made a $0.9 million investment in the stock during the quarter. The other funds with new positions in the stock are Jeffrey Diehl’s Adams Street Partners, Ken Griffin’s Citadel Investment Group, and John Overdeck and David Siegel’s Two Sigma Advisors.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Pulmonx Corporation (NASDAQ:LUNG) but similarly valued. We will take a look at Berkshire Hills Bancorp, Inc. (NYSE:BHLB), Cardiovascular Systems Inc (NASDAQ:CSII), Avid Technology, Inc. (NASDAQ:AVID), Primoris Services Corp (NASDAQ:PRIM), Berkeley Lights, Inc. (NASDAQ:BLI), Getty Realty Corp. (NYSE:GTY), and Apria, Inc. (NASDAQ:APR). All of these stocks’ market caps are similar to LUNG’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 15.4 hedge funds with bullish positions and the average amount invested in these stocks was $156 million. That figure was $250 million in LUNG’s case. Avid Technology, Inc. (NASDAQ:AVID) is the most popular stock in this table. On the other hand Getty Realty Corp. (NYSE:GTY) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Pulmonx Corporation (NASDAQ:LUNG) is more popular among hedge funds. Our overall hedge fund sentiment score for LUNG is 81.4. 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. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately LUNG wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on LUNG were disappointed as the stock returned -10.9% since the end of the third quarter (through 12/31) 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 most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.