The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors endured a torrid quarter, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Stratasys, Ltd. (NASDAQ:SSYS).
Is Stratasys, Ltd. (NASDAQ:SSYS) an attractive investment right now? Money managers are becoming more confident. The number of bullish hedge fund positions went up by 2 in recent months. Our calculations also showed that SSYS isn’t among the 30 most popular stocks among hedge funds. SSYS was in 14 hedge funds’ portfolios at the end of September. There were 12 hedge funds in our database with SSYS holdings at the end of the previous quarter.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We’re going to take a look at the latest hedge fund action surrounding Stratasys, Ltd. (NASDAQ:SSYS).
What have hedge funds been doing with Stratasys, Ltd. (NASDAQ:SSYS)?
At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards SSYS over the last 13 quarters. With hedgies’ capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
More specifically, Fisher Asset Management was the largest shareholder of Stratasys, Ltd. (NASDAQ:SSYS), with a stake worth $67.1 million reported as of the end of September. Trailing Fisher Asset Management was Royce & Associates, which amassed a stake valued at $12.6 million. GAMCO Investors, Coatue Management, and Two Sigma Advisors were also very fond of the stock, giving the stock large weights in their portfolios.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. PEAK6 Capital Management, managed by Matthew Hulsizer, created the most valuable position in Stratasys, Ltd. (NASDAQ:SSYS). PEAK6 Capital Management had $0.4 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also made a $0.3 million investment in the stock during the quarter. The following funds were also among the new SSYS investors: Joel Greenblatt’s Gotham Asset Management and Frederick DiSanto’s Ancora Advisors.
Let’s now review hedge fund activity in other stocks similar to Stratasys, Ltd. (NASDAQ:SSYS). These stocks are Tompkins Financial Corporation (NYSEAMEX:TMP), CNX Midstream Partners LP (NYSE:CNXM), Enterprise Financial Services Corp (NASDAQ:EFSC), and Goosehead Insurance, Inc. (NASDAQ:GSHD). This group of stocks’ market caps resemble SSYS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TMP | 7 | 15320 | 1 |
| CNXM | 9 | 32772 | 2 |
| EFSC | 13 | 75877 | -1 |
| GSHD | 4 | 16841 | 0 |
| Average | 8.25 | 35203 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.25 hedge funds with bullish positions and the average amount invested in these stocks was $35 million. That figure was $112 million in SSYS’s case. Enterprise Financial Services Corp (NASDAQ:EFSC) is the most popular stock in this table. On the other hand Goosehead Insurance, Inc. (NASDAQ:GSHD) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Stratasys, Ltd. (NASDAQ:SSYS) 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.
Disclosure: None. This article was originally published at Insider Monkey.
