Hedge Funds Are Selling ClearPoint Neuro Inc. (CLPT)

In this article we are going to use hedge fund sentiment as a tool and determine whether ClearPoint Neuro Inc. (NASDAQ:CLPT) 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.

ClearPoint Neuro Inc. (NASDAQ:CLPT) was in 6 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 7. CLPT investors should be aware of a decrease in hedge fund interest lately. There were 7 hedge funds in our database with CLPT positions at the end of the fourth quarter. Our calculations also showed that CLPT isn’t among the 30 most popular stocks among hedge funds (click for Q1 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. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Michael Gelband of ExodusPoint Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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 let’s view the new hedge fund action regarding ClearPoint Neuro Inc. (NASDAQ:CLPT).

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

Heading into the second quarter of 2021, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards CLPT over the last 23 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Zachary Miller’s Parian Global Management has the most valuable position in ClearPoint Neuro Inc. (NASDAQ:CLPT), worth close to $12.1 million, comprising 5.5% of its total 13F portfolio. The second most bullish fund manager is Millennium Management, managed by Israel Englander, which holds a $4.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers that hold long positions encompass Renaissance Technologies, Chuck Royce’s Royce & Associates and Michael Gelband’s ExodusPoint Capital. In terms of the portfolio weights assigned to each position Parian Global Management allocated the biggest weight to ClearPoint Neuro Inc. (NASDAQ:CLPT), around 5.54% of its 13F portfolio. Blackcrane Capital is also relatively very bullish on the stock, earmarking 1.37 percent of its 13F equity portfolio to CLPT.

Since ClearPoint Neuro Inc. (NASDAQ:CLPT) has witnessed declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there were a few fund managers that elected to cut their entire stakes last quarter. Interestingly, Ari Zweiman’s 683 Capital Partners dropped the largest position of the “upper crust” of funds watched by Insider Monkey, valued at close to $0.3 million in stock. Russell Lucas’s fund, Lucas Capital Management, also said goodbye to its stock, about $0.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest fell by 1 funds last quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as ClearPoint Neuro Inc. (NASDAQ:CLPT) but similarly valued. These stocks are Intrepid Potash, Inc. (NYSE:IPI), Daily Journal Corporation (NASDAQ:DJCO), Tuscan Holdings Corp. (NASDAQ:THCB), Huize Holding Limited (NASDAQ:HUIZ), GreenBox POS (NASDAQ:GBOX), Qudian Inc. (NYSE:QD), and Retractable Technologies, Inc. (NYSE:RVP). This group of stocks’ market caps match CLPT’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.9 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $21 million in CLPT’s case. Tuscan Holdings Corp. (NASDAQ:THCB) is the most popular stock in this table. On the other hand Daily Journal Corporation (NASDAQ:DJCO) is the least popular one with only 1 bullish hedge fund positions. ClearPoint Neuro Inc. (NASDAQ:CLPT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CLPT is 57.5. 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 19.3% in 2021 through June 25th and beat the market again by 4.8 percentage points. Unfortunately CLPT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CLPT were disappointed as the stock returned -4.1% since the end of March (through 6/25) 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.