Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Vocera Communications Inc (NYSE:VCRA) in this article.
Vocera Communications Inc (NYSE:VCRA) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 17 hedge funds’ portfolios at the end of the first quarter of 2019. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Marten Transport, Ltd (NASDAQ:MRTN), W&T Offshore, Inc. (NYSE:WTI), and Vanda Pharmaceuticals Inc. (NASDAQ:VNDA) to gather more data points.
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’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 30.9% through May 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Noam Gottesman, GLG Partners
Let’s check out the recent hedge fund action regarding Vocera Communications Inc (NYSE:VCRA).
What does smart money think about Vocera Communications Inc (NYSE:VCRA)?
At the end of the first quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the fourth quarter of 2018. Below, you can check out the change in hedge fund sentiment towards VCRA over the last 15 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Vocera Communications Inc (NYSE:VCRA) was held by Renaissance Technologies, which reported holding $19.4 million worth of stock at the end of March. It was followed by GLG Partners with a $15.3 million position. Other investors bullish on the company included Endurant Capital Management, Sectoral Asset Management, and Millennium Management.
Since Vocera Communications Inc (NYSE:VCRA) has faced declining sentiment from the aggregate hedge fund industry, it’s easy to see that there was a specific group of funds that decided to sell off their entire stakes last quarter. Intriguingly, Richard Driehaus’s Driehaus Capital sold off the largest position of all the hedgies tracked by Insider Monkey, comprising about $18.8 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also cut its stock, about $5.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Vocera Communications Inc (NYSE:VCRA). These stocks are Marten Transport, Ltd (NASDAQ:MRTN), W&T Offshore, Inc. (NYSE:WTI), Vanda Pharmaceuticals Inc. (NASDAQ:VNDA), and PC Connection, Inc. (NASDAQ:CNXN). All of these stocks’ market caps resemble VCRA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MRTN | 17 | 48530 | 0 |
| WTI | 24 | 113104 | 3 |
| VNDA | 19 | 254336 | 0 |
| CNXN | 8 | 41972 | 2 |
| Average | 17 | 114486 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $114 million. That figure was $73 million in VCRA’s case. W&T Offshore, Inc. (NYSE:WTI) is the most popular stock in this table. On the other hand PC Connection, Inc. (NASDAQ:CNXN) is the least popular one with only 8 bullish hedge fund positions. Vocera Communications Inc (NYSE:VCRA) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and 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 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately VCRA wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); VCRA investors were disappointed as the stock returned -1.4% during the same time period 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 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.
