How do we determine whether Cardiovascular Systems Inc (NASDAQ:CSII) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
Cardiovascular Systems Inc (NASDAQ:CSII) investors should pay attention to a decrease in support from the world’s most elite money managers recently. CSII was in 15 hedge funds’ portfolios at the end of September. There were 17 hedge funds in our database with CSII positions at the end of the previous quarter. Our calculations also showed that CSII isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are tons of tools stock traders use to evaluate publicly traded companies. A couple of the most innovative tools are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the elite hedge fund managers can outperform their index-focused peers by a significant margin (see the details here).
Mario Gabelli of GAMCO Investors
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. Let’s analyze the latest hedge fund action surrounding Cardiovascular Systems Inc (NASDAQ:CSII).
What have hedge funds been doing with Cardiovascular Systems Inc (NASDAQ:CSII)?
Heading into the fourth quarter of 2019, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -12% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CSII over the last 17 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Cardiovascular Systems Inc (NASDAQ:CSII), with a stake worth $70.2 million reported as of the end of September. Trailing Renaissance Technologies was Partner Fund Management, which amassed a stake valued at $22.1 million. Millennium Management, D E Shaw, and GAMCO Investors 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 DAFNA Capital Management allocated the biggest weight to Cardiovascular Systems Inc (NASDAQ:CSII), around 0.83% of its 13F portfolio. Partner Fund Management is also relatively very bullish on the stock, earmarking 0.65 percent of its 13F equity portfolio to CSII.
Since Cardiovascular Systems Inc (NASDAQ:CSII) has experienced a decline in interest from the smart money, we can see that there is a sect of hedgies who sold off their positions entirely last quarter. Interestingly, Dmitry Balyasny’s Balyasny Asset Management dropped the biggest stake of the “upper crust” of funds monitored by Insider Monkey, valued at about $7.1 million in stock. Chuck Royce’s fund, Royce & Associates, also sold off its stock, about $3.3 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 2 funds last quarter.
Let’s now review hedge fund activity in other stocks similar to Cardiovascular Systems Inc (NASDAQ:CSII). We will take a look at Merit Medical Systems, Inc. (NASDAQ:MMSI), Cott Corporation (NYSE:COT), Usa Compression Partners LP (NYSE:USAC), and Veoneer, Inc. (NYSE:VNE). All of these stocks’ market caps are similar to CSII’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MMSI | 16 | 79954 | -1 |
| COT | 26 | 587913 | -1 |
| USAC | 4 | 5116 | 1 |
| VNE | 10 | 149807 | -2 |
| Average | 14 | 205698 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $206 million. That figure was $127 million in CSII’s case. Cott Corporation (NYSE:COT) is the most popular stock in this table. On the other hand Usa Compression Partners LP (NYSE:USAC) is the least popular one with only 4 bullish hedge fund positions. Cardiovascular Systems Inc (NASDAQ:CSII) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately CSII wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on CSII were disappointed as the stock returned -4.1% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
