With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter of 2021. One of these stocks was DexCom, Inc. (NASDAQ:DXCM).
Is DexCom, Inc. (NASDAQ:DXCM) a splendid stock to buy now? The smart money was getting more optimistic. The number of bullish hedge fund bets rose by 4 recently. DexCom, Inc. (NASDAQ:DXCM) was in 53 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 58. Our calculations also showed that DXCM 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. Keeping this in mind let’s review the fresh hedge fund action encompassing DexCom, Inc. (NASDAQ:DXCM).
Ken Griffin of Citadel Investment Group
Do Hedge Funds Think DXCM Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 53 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 8% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in DXCM over the last 25 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in DexCom, Inc. (NASDAQ:DXCM) was held by Lone Pine Capital, which reported holding $788.1 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $238.7 million position. Other investors bullish on the company included OrbiMed Advisors, Holocene Advisors, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Parkman Healthcare Partners allocated the biggest weight to DexCom, Inc. (NASDAQ:DXCM), around 6.29% of its 13F portfolio. Engine No. 1 LLC is also relatively very bullish on the stock, designating 5.07 percent of its 13F equity portfolio to DXCM.
As industrywide interest jumped, some big names were leading the bulls’ herd. Echo Street Capital Management, managed by Greg Poole, assembled the largest position in DexCom, Inc. (NASDAQ:DXCM). Echo Street Capital Management had $60.9 million invested in the company at the end of the quarter. Benjamin A. Smith’s Laurion Capital Management also made a $27.3 million investment in the stock during the quarter. The other funds with brand new DXCM positions are James Crichton’s Hitchwood Capital Management, Stephen Yiu’s Blue Whale Capital, and Michael Rockefeller and KarláKroeker’s Woodline Partners.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as DexCom, Inc. (NASDAQ:DXCM) but similarly valued. These stocks are The Progressive Corporation (NYSE:PGR), Metlife Inc (NYSE:MET), IDEXX Laboratories, Inc. (NASDAQ:IDXX), Align Technology, Inc. (NASDAQ:ALGN), Lululemon Athletica inc. (NASDAQ:LULU), Public Storage (NYSE:PSA), and NXP Semiconductors NV (NASDAQ:NXPI). This group of stocks’ market caps resemble DXCM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PGR | 47 | 1574950 | 3 |
| MET | 39 | 1145473 | -2 |
| IDXX | 43 | 3698749 | 4 |
| ALGN | 49 | 2262912 | -8 |
| LULU | 41 | 709432 | -5 |
| PSA | 35 | 1260285 | 8 |
| NXPI | 51 | 1080819 | -1 |
| Average | 43.6 | 1676089 | -0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 43.6 hedge funds with bullish positions and the average amount invested in these stocks was $1676 million. That figure was $1782 million in DXCM’s case. NXP Semiconductors NV (NASDAQ:NXPI) is the most popular stock in this table. On the other hand Public Storage (NYSE:PSA) is the least popular one with only 35 bullish hedge fund positions. Compared to these stocks DexCom, Inc. (NASDAQ:DXCM) is more popular among hedge funds. Our overall hedge fund sentiment score for DXCM is 86.4. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately DXCM wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on DXCM were disappointed as the stock returned 2.9% since the end of the third quarter (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 most of these stocks already outperformed the market since 2019.
Follow Dexcom Inc (NASDAQ:DXCM)
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Disclosure: None. This article was originally published at Insider Monkey.
