Hedge Funds Are Crazy About Impinj, Inc. (PI)

In this article we are going to use hedge fund sentiment as a tool and determine whether Impinj, Inc. (NASDAQ:PI) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Is Impinj, Inc. (NASDAQ:PI) a safe investment now? Investors who are in the know were becoming hopeful. The number of bullish hedge fund bets moved up by 2 recently. Impinj, Inc. (NASDAQ:PI) was in 22 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 22. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PI isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 20 hedge funds in our database with PI holdings at the end of June.

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 look at the latest hedge fund action regarding Impinj, Inc. (NASDAQ:PI).

Richard Driehaus of Driehaus Capital

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

Heading into the fourth quarter of 2021, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 10% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards PI over the last 25 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

Among these funds, Sylebra Capital Management held the most valuable stake in Impinj, Inc. (NASDAQ:PI), which was worth $251.2 million at the end of the third quarter. On the second spot was Driehaus Capital which amassed $37.6 million worth of shares. Toronado Partners, Intrinsic Edge Capital, and D E Shaw 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 Toronado Partners allocated the biggest weight to Impinj, Inc. (NASDAQ:PI), around 12.46% of its 13F portfolio. Sylebra Capital Management is also relatively very bullish on the stock, earmarking 5.66 percent of its 13F equity portfolio to PI.

As industrywide interest jumped, some big names were breaking ground themselves. Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, initiated the largest position in Impinj, Inc. (NASDAQ:PI). Polar Capital had $5.2 million invested in the company at the end of the quarter. Peter Algert’s Algert Global also made a $0.8 million investment in the stock during the quarter. The only other fund with a brand new PI position is Hoon Kim’s Quantinno Capital.

Let’s now take a look at hedge fund activity in other stocks similar to Impinj, Inc. (NASDAQ:PI). We will take a look at Replimune Group, Inc. (NASDAQ:REPL), First Busey Corporation (NASDAQ:BUSE), ePlus Inc. (NASDAQ:PLUS), Paya Holdings Inc. (NASDAQ:PAYA), Alliance Resource Partners, L.P. (NASDAQ:ARLP), Tennant Company (NYSE:TNC), and Weatherford International plc (NASDAQ:WFRD). This group of stocks’ market valuations match PI’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.3 hedge funds with bullish positions and the average amount invested in these stocks was $110 million. That figure was $410 million in PI’s case. Tennant Company (NYSE:TNC) is the most popular stock in this table. On the other hand Alliance Resource Partners, L.P. (NASDAQ:ARLP) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Impinj, Inc. (NASDAQ:PI) is more popular among hedge funds. Our overall hedge fund sentiment score for PI is 87. 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 returned 29.6% in 2021 and managed to beat the market by 3.6 percentage points. Hedge funds were also right about betting on PI as the stock returned 55.3% since the end of September (through 12/31) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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