The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 873 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 30th holdings, data that is available nowhere else. Should you consider Stratasys, Ltd. (NASDAQ:SSYS) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Stratasys, Ltd. (NASDAQ:SSYS) investors should be aware of a decrease in activity from the world’s largest hedge funds of late. Stratasys, Ltd. (NASDAQ:SSYS) was in 21 hedge funds’ portfolios at the end of June. The all time high for this statistic is 24. Our calculations also showed that SSYS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Dmitry Balyasny of Balyasny Asset 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. Keeping this in mind we’re going to take a glance at the new hedge fund action regarding Stratasys, Ltd. (NASDAQ:SSYS).
Do Hedge Funds Think SSYS 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 -13% from one quarter earlier. By comparison, 19 hedge funds held shares or bullish call options in SSYS 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.
The largest stake in Stratasys, Ltd. (NASDAQ:SSYS) was held by ARK Investment Management, which reported holding $229.4 million worth of stock at the end of June. It was followed by Renaissance Technologies with a $47.3 million position. Other investors bullish on the company included D E Shaw, Two Sigma Advisors, and Citadel Investment Group. In terms of the portfolio weights assigned to each position ARK Investment Management allocated the biggest weight to Stratasys, Ltd. (NASDAQ:SSYS), around 0.43% of its 13F portfolio. PDT Partners is also relatively very bullish on the stock, setting aside 0.31 percent of its 13F equity portfolio to SSYS.
Seeing as Stratasys, Ltd. (NASDAQ:SSYS) has witnessed declining sentiment from hedge fund managers, logic holds that there were a few hedge funds who sold off their full holdings heading into Q3. It’s worth mentioning that Frank Fu’s CaaS Capital dropped the largest stake of the “upper crust” of funds watched by Insider Monkey, worth about $7.5 million in stock, and Matthew L Pinz’s Pinz Capital was right behind this move, as the fund sold off about $4.7 million worth. These transactions are important to note, as total hedge fund interest was cut by 3 funds heading into Q3.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Stratasys, Ltd. (NASDAQ:SSYS) but similarly valued. These stocks are Bottomline Technologies (NASDAQ:EPAY), The E.W. Scripps Company (NYSE:SSP), La-Z-Boy Incorporated (NYSE:LZB), Oxford Industries, Inc. (NYSE:OXM), Smith & Wesson Brands, Inc. (NASDAQ:SWBI), Alector, Inc. (NASDAQ:ALEC), and Aurinia Pharmaceuticals Inc (NASDAQ:AUPH). This group of stocks’ market caps are closest to SSYS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EPAY | 24 | 193134 | 5 |
| SSP | 18 | 176763 | -4 |
| LZB | 21 | 101794 | -3 |
| OXM | 14 | 71802 | 7 |
| SWBI | 21 | 242514 | 3 |
| ALEC | 18 | 218745 | 3 |
| AUPH | 18 | 173527 | -9 |
| Average | 19.1 | 168326 | 0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19.1 hedge funds with bullish positions and the average amount invested in these stocks was $168 million. That figure was $402 million in SSYS’s case. Bottomline Technologies (NASDAQ:EPAY) is the most popular stock in this table. On the other hand Oxford Industries, Inc. (NYSE:OXM) is the least popular one with only 14 bullish hedge fund positions. Stratasys, Ltd. (NASDAQ:SSYS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SSYS is 63.3. 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. Hedge funds were also right about betting on SSYS as the stock returned 8.3% since the end of Q2 (through 10/22) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Stratasys Inc (NASDAQ:SSYS)
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Disclosure: None. This article was originally published at Insider Monkey.
