Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the second quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Stereotaxis Inc (NASDAQ:STXS) based on that data.
Stereotaxis Inc (NASDAQ:STXS) was in 21 hedge funds’ portfolios at the end of June. The all time high for this statistic was previously 16. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. STXS investors should pay attention to an increase in hedge fund sentiment of late. There were 15 hedge funds in our database with STXS positions at the end of the first quarter. Our calculations also showed that STXS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
James E. Flynn of Deerfield Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. With all of this in mind we’re going to go over the key hedge fund action surrounding Stereotaxis Inc (NASDAQ:STXS).
Do Hedge Funds Think STXS Is A Good Stock To Buy Now?
At the end of June, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 40% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in STXS over the last 24 quarters. With hedgies’ sentiment swirling, there exists an “upper tier” of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
More specifically, DAFNA Capital Management was the largest shareholder of Stereotaxis Inc (NASDAQ:STXS), with a stake worth $131.9 million reported as of the end of June. Trailing DAFNA Capital Management was Opaleye Management, which amassed a stake valued at $24.4 million. Arbiter Partners Capital Management, Redmile Group, and Deerfield 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 DAFNA Capital Management allocated the biggest weight to Stereotaxis Inc (NASDAQ:STXS), around 27.58% of its 13F portfolio. Opaleye Management is also relatively very bullish on the stock, setting aside 4.05 percent of its 13F equity portfolio to STXS.
As aggregate interest increased, key hedge funds were leading the bulls’ herd. Deerfield Management, managed by James E. Flynn, established the most valuable position in Stereotaxis Inc (NASDAQ:STXS). Deerfield Management had $17.8 million invested in the company at the end of the quarter. Zachary Miller’s Parian Global Management also initiated a $5.8 million position during the quarter. The other funds with brand new STXS positions are Benjamin A. Smith’s Laurion Capital Management, Devesh Gandhi’s SilverArc Capital, and Kevin Molloy’s Iron Triangle Partners.
Let’s now review hedge fund activity in other stocks similar to Stereotaxis Inc (NASDAQ:STXS). We will take a look at Cara Therapeutics Inc (NASDAQ:CARA), Camden National Corporation (NASDAQ:CAC), Winmark Corporation (NASDAQ:WINA), Global Ship Lease, Inc. (NYSE:GSL), SP Plus Corp (NASDAQ:SP), AnaptysBio, Inc. (NASDAQ:ANAB), and CrossFirst Bankshares, Inc. (NASDAQ:CFB). This group of stocks’ market values are similar to STXS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CARA | 17 | 70556 | 0 |
| CAC | 14 | 47590 | -1 |
| WINA | 10 | 87293 | 0 |
| GSL | 18 | 96951 | 7 |
| SP | 15 | 29739 | 5 |
| ANAB | 20 | 402981 | 2 |
| CFB | 8 | 19382 | 3 |
| Average | 14.6 | 107785 | 2.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.6 hedge funds with bullish positions and the average amount invested in these stocks was $108 million. That figure was $266 million in STXS’s case. AnaptysBio, Inc. (NASDAQ:ANAB) is the most popular stock in this table. On the other hand CrossFirst Bankshares, Inc. (NASDAQ:CFB) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Stereotaxis Inc (NASDAQ:STXS) is more popular among hedge funds. Our overall hedge fund sentiment score for STXS is 90. 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Unfortunately STXS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on STXS were disappointed as the stock returned -39.8% since the end of the second quarter (through 10/22) 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 Stereotaxis Inc. (NASDAQ:STXS)
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Disclosure: None. This article was originally published at Insider Monkey.
