Here is What Hedge Funds Think About Tandem Diabetes Care Inc (TNDM)

Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.

Tandem Diabetes Care Inc (NASDAQ:TNDM) has seen an increase in hedge fund interest of late. There were 11 hedge funds in our database with TNDM positions at the end of the previous quarter. 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 Enzo Biochem, Inc. (NYSE:ENZ), vTv Therapeutics Inc (NASDAQ:VTVT), and ImmunoGen, Inc. (NASDAQ:IMGN) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Now, we’re going to analyze the fresh action encompassing Tandem Diabetes Care Inc (NASDAQ:TNDM).

How have hedgies been trading Tandem Diabetes Care Inc (NASDAQ:TNDM)?

At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards TNDM over the last 5 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Point72 Asset Management, led by Steve Cohen, holds the number one position in Tandem Diabetes Care Inc (NASDAQ:TNDM). Point72 Asset Management has a $7.5 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, one of the 10 largest hedge funds in the world, holding a $6.3 million position; the fund has less than 0.1% of its 13F portfolio invested in the stock. Some other professional money managers that hold long positions consist of Nathan Fischel’s DAFNA Capital Management, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management and Jim Simons’ Renaissance Technologies. We should note that none of these elite funds are among our list of the 100 best elite hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

As industrywide interest jumped, some big names were breaking ground themselves. Broadfin Capital, led by Kevin Kotler, created the largest position in Tandem Diabetes Care Inc (NASDAQ:TNDM). Broadfin Capital had $2.6 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.1 million investment in the stock during the quarter.

Let’s also examine hedge fund activity in other stocks similar to Tandem Diabetes Care Inc (NASDAQ:TNDM). We will take a look at Enzo Biochem, Inc. (NYSE:ENZ), vTv Therapeutics Inc (NASDAQ:VTVT), ImmunoGen, Inc. (NASDAQ:IMGN), and TerraVia Holdings, Inc. (NASDAQ:TVIA). This group of stocks’ market caps are closest to TNDM’s market cap.

As you can see these stocks had an average of 8 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $34 million in TNDM’s case. ImmunoGen, Inc. (NASDAQ:IMGN) is the most popular stock in this table. On the other hand vTv Therapeutics Inc (NASDAQ:VTVT) is the least popular one with only 3 bullish hedge fund positions. Tandem Diabetes Care Inc (NASDAQ:TNDM) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard IMGN might be a better candidate to consider taking a long position in.