Here is What Hedge Funds Think About Nevro Corp (NVRO)

Between June 25 and October 30th the Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by more than 14 percentage points as investors worried over the possible ramifications of rising interest rates. The hedge funds and institutional investors we track typically invest more in smaller-cap stocks than an average investor, and we have seen data that shows those funds paring back their overall exposure. Those funds cutting positions in small-caps is one reason why volatility has increased. In the following paragraphs, we take a closer look at what hedge funds and prominent investors think of Nevro Corp (NYSE:NVRO) and see how the stock is affected by the recent hedge fund activity.

Nevro Corp (NYSE:NVRO) was in 21 hedge funds’ portfolios at the end of the third quarter of 2015. NVRO has seen an increase in hedge fund sentiment lately. There were 19 hedge funds in our database with NVRO positions at the end of the previous quarter. At the end of this article we will also compare NVRO to other stocks, including Surgical Care Affiliates Inc (NASDAQ:SCAI), TeleTech Holdings, Inc. (NASDAQ:TTEC), and Forward Air Corporation (NASDAQ:FWRD) to get a better sense of its popularity.

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Keeping this in mind, we’re going to take a look at the latest action regarding Nevro Corp (NYSE:NVRO).

What does the smart money think about Nevro Corp (NYSE:NVRO)?

Heading into Q4, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, an increase of 11% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Kevin Kotler’s Broadfin Capital has the biggest position in Nevro Corp (NYSE:NVRO), worth close to $74.6 million, amounting to 4.2% of its total 13F portfolio. Sitting at the No. 2 spot is Joseph Edelman of Perceptive Advisors, with a $28.2 million position; the fund has 2.3% of its 13F portfolio invested in the stock. Other professional money managers that are bullish contain Steve Cohen’s Point72 Asset Management, Ken Griffin’s Citadel Investment Group and Clifford Fox’s Columbus Circle Investors.

As aggregate interest increased, key hedge funds were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, assembled the most valuable position in Nevro Corp (NYSE:NVRO). According to its latest 13F filing, the fund had $16.3 million invested in the company at the end of the quarter. Kevin Kotler’s Broadfin Capital also made a $9.3 million addition to his previous investment in the stock during the quarter. The other funds with new positions in the stock are Constantinos J. Christofilis’s Archon Capital Management, Matthew Hulsizer’s PEAK6 Capital Management, and Jeremy Green’s Redmile Group.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Nevro Corp (NYSE:NVRO) but similarly valued. We will take a look at Surgical Care Affiliates Inc (NASDAQ:SCAI), TeleTech Holdings, Inc. (NASDAQ:TTEC), Forward Air Corporation (NASDAQ:FWRD), and Progress Software Corporation (NASDAQ:PRGS). This group of stocks’ market caps resemble NVRO’s market cap.

As you can see these stocks had an average of 15 hedge funds with bullish positions and the average amount invested in these stocks was $86 million. That figure was $222 million in NVRO’s case. Surgical Care Affiliates Inc (NASDAQ:SCAI) and TeleTech Holdings, Inc. (NASDAQ:TTEC) are leading the pack, while Forward Air Corporation (NASDAQ:FWRD) and Progress Software Corporation (NASDAQ:PRGS) are the laggards with only 13 bullish hedge fund positions. Compared to these stocks Nevro Corp (NYSE:NVRO) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.