At the end of February we announced the arrival of the first US recession since 2009 and we predicted 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 ReWalk Robotics Ltd. (NASDAQ:RWLK).
ReWalk Robotics Ltd. (NASDAQ:RWLK) has experienced an increase in hedge fund interest recently. Our calculations also showed that RWLK isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 72% since March 2017 and outperformed the S&P 500 ETFs by more than 44 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Sander Gerber of Hudson Bay Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to check out the latest hedge fund action encompassing ReWalk Robotics Ltd. (NASDAQ:RWLK).
How have hedgies been trading ReWalk Robotics Ltd. (NASDAQ:RWLK)?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 200% from the previous quarter. On the other hand, there were a total of 1 hedge funds with a bullish position in RWLK a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
Among these funds, Sabby Capital held the most valuable stake in ReWalk Robotics Ltd. (NASDAQ:RWLK), which was worth $0.1 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $0.1 million worth of shares. Hudson Bay Capital Management was 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 Sabby Capital allocated the biggest weight to ReWalk Robotics Ltd. (NASDAQ:RWLK), around 0.04% of its 13F portfolio. Hudson Bay Capital Management is also relatively very bullish on the stock, earmarking 0.0024 percent of its 13F equity portfolio to RWLK.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Renaissance Technologies, created the biggest position in ReWalk Robotics Ltd. (NASDAQ:RWLK). Renaissance Technologies had $0.1 million invested in the company at the end of the quarter. Sander Gerber’s Hudson Bay Capital Management also initiated a $0.1 million position during the quarter.
Let’s now review hedge fund activity in other stocks similar to ReWalk Robotics Ltd. (NASDAQ:RWLK). We will take a look at Synthetic Biologics Inc (NYSE:SYN), Independence Contract Drilling Inc (NYSE:ICD), Qualstar Corporation (NASDAQ:QBAK), and Barnwell Industries, Inc. (NYSE:BRN). This group of stocks’ market valuations are closest to RWLK’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SYN | 2 | 246 | 0 |
| ICD | 7 | 2387 | -3 |
| QBAK | 1 | 375 | 0 |
| BRN | 1 | 100 | 0 |
| Average | 2.75 | 777 | -0.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.75 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $0 million in RWLK’s case. Independence Contract Drilling Inc (NYSE:ICD) is the most popular stock in this table. On the other hand Qualstar Corporation (NASDAQ:QBAK) is the least popular one with only 1 bullish hedge fund positions. ReWalk Robotics Ltd. (NASDAQ:RWLK) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd but still beat the market by 15.6 percentage points. Hedge funds were also right about betting on RWLK as the stock returned 191.7% in Q2 (through May 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
