Hedge Funds Are Crazy About Cynosure, Inc. (CYNO)

At Insider Monkey, we pore over the filings of more than 700 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 30. In this article, we will use that wealth of knowledge to determine whether or not Cynosure, Inc. (NASDAQ:CYNO) makes for a good investment right now.

Cynosure, Inc. shareholders have witnessed an increase in hedge fund sentiment lately. At the end of this article we will also compare CYNO to other stocks including Affymetrix, Inc. (NASDAQ:AFFX), Yadkin Financial Corp (NASDAQ:YDKN), and Supernus Pharmaceuticals Inc (NASDAQ:SUPN) to get a better sense of its popularity.

At the moment there are several metrics stock traders employ to analyze publicly traded companies. A pair of the most under-the-radar metrics is composed of hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the elite money managers can trounce the market by a healthy margin (see the details here).

With all of this in mind, let’s take a look at the fresh action regarding Cynosure, Inc. (NASDAQ:CYNO).

Hedge fund activity in Cynosure, Inc. (NASDAQ:CYNO)

At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the second quarter. With hedgies’ capital changing hands, there exist a few key hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

When looking at the institutional investors followed by Insider Monkey, Broadwood Capital, managed by Neal C. Bradsher, holds the number one position in Cynosure, Inc. (NASDAQ:CYNO). Broadwood Capital has a $26.9 million position in the stock, comprising 5.3% of its 13F portfolio. Sitting at the No. 2 spot is Clifford Fox of Columbus Circle Investors, with a $26.3 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Some other peers that hold long positions consist of Cliff Asness’s AQR Capital Management and Chuck Royce’s Royce & Associates.

As aggregate interest increased, key hedge funds have jumped into Cynosure, Inc. (NASDAQ:CYNO) headfirst. Archon Capital Management, managed by Constantinos J. Christofilis, initiated the largest position in Cynosure, Inc. (NASDAQ:CYNO). Archon Capital Management had $4.3 million invested in the company at the end of the quarter. Ken Fisher’s Fisher Asset Management also made a $2.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Glenn Russell Dubin’s Highbridge Capital Management, Israel Englander’s Millennium Management, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Let’s also examine hedge fund activity in other stocks similar to Cynosure, Inc. (NASDAQ:CYNO). We will take a look at Affymetrix, Inc. (NASDAQ:AFFX), Yadkin Financial Corp (NASDAQ:YDKN), Supernus Pharmaceuticals Inc (NASDAQ:SUPN), and General Communication, Inc. (NASDAQ:GNCMA). This group of stocks’ market caps match CYNO’s market cap.

As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $80 million. That figure was $77 million in CYNO’s case. Affymetrix, Inc. (NASDAQ:AFFX) is the most popular stock in this table. On the other hand Yadkin Financial Corp (NASDAQ:YDKN) is the least popular one with only 10 bullish hedge fund positions. In comparison, Cynosure, Inc. (NASDAQ:CYNO) is not the most popular stock in this group but still has attracted attention from investors. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are collectively most bullish on, such as AFFX in this particular group.