Hedge Funds Are Piling Into Intuitive Surgical, Inc. (ISRG)

Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Intuitive Surgical, Inc. (NASDAQ:ISRG).

Intuitive Surgical, Inc. (NASDAQ:ISRG) has experienced an increase in hedge fund sentiment lately. Intuitive Surgical, Inc. (NASDAQ:ISRG) was in 61 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 60. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ISRG 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. With all of this in mind let’s take a glance at the latest hedge fund action regarding Intuitive Surgical, Inc. (NASDAQ:ISRG).

Brad Farber of Atika Capital

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

At the end of the third quarter, a total of 61 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 2% from the second quarter of 2021. By comparison, 50 hedge funds held shares or bullish call options in ISRG a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Fisher Asset Management held the most valuable stake in Intuitive Surgical, Inc. (NASDAQ:ISRG), which was worth $1360 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $373.8 million worth of shares. Two Sigma Advisors, Arrowstreet Capital, and Millennium Management 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 Unio Capital allocated the biggest weight to Intuitive Surgical, Inc. (NASDAQ:ISRG), around 4.26% of its 13F portfolio. Aubrey Capital Management is also relatively very bullish on the stock, earmarking 2.75 percent of its 13F equity portfolio to ISRG.

As one would reasonably expect, key money managers have been driving this bullishness. Atika Capital, managed by Brad Farber, initiated the most outsized position in Intuitive Surgical, Inc. (NASDAQ:ISRG). Atika Capital had $7.9 million invested in the company at the end of the quarter. Chen Tianqiao’s Shanda Asset Management also initiated a $7 million position during the quarter. The other funds with brand new ISRG positions are Paul Tudor Jones’s Tudor Investment Corp, Paul Tudor Jones’s Tudor Investment Corp, and Karim Abbadi and Edward McBride’s Centiva Capital.

Let’s go over hedge fund activity in other stocks similar to Intuitive Surgical, Inc. (NASDAQ:ISRG). We will take a look at Snap Inc. (NYSE:SNAP), Applied Materials, Inc. (NASDAQ:AMAT), Pinduoduo Inc. (NASDAQ:PDD), General Electric Company (NYSE:GE), Diageo plc (NYSE:DEO), JD.Com Inc (NASDAQ:JD), and CVS Health Corporation (NYSE:CVS). All of these stocks’ market caps resemble ISRG’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 56.1 hedge funds with bullish positions and the average amount invested in these stocks was $4523 million. That figure was $3536 million in ISRG’s case. Snap Inc. (NYSE:SNAP) is the most popular stock in this table. On the other hand Diageo plc (NYSE:DEO) is the least popular one with only 18 bullish hedge fund positions. Intuitive Surgical, Inc. (NASDAQ:ISRG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ISRG is 71.8. 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. 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 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 beat the market again by 5.6 percentage points. Unfortunately ISRG wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ISRG were disappointed as the stock returned -2.1% since the end of September (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 many of these stocks already outperformed the market since 2019.

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