The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Insulet Corporation (NASDAQ:PODD) based on those filings.
Insulet Corporation (NASDAQ:PODD) investors should pay attention to an increase in enthusiasm from smart money recently. PODD was in 36 hedge funds’ portfolios at the end of March. There were 34 hedge funds in our database with PODD positions at the end of the previous quarter. Our calculations also showed that PODD 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 51 percentage points since March 2017 (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 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Kris Jenner of Rock Springs Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. 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 the 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 take a peek at the latest hedge fund action surrounding Insulet Corporation (NASDAQ:PODD).
Hedge fund activity in Insulet Corporation (NASDAQ:PODD)
Heading into the second quarter of 2020, a total of 36 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PODD over the last 18 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Coatue Management was the largest shareholder of Insulet Corporation (NASDAQ:PODD), with a stake worth $238 million reported as of the end of September. Trailing Coatue Management was Citadel Investment Group, which amassed a stake valued at $72.3 million. Renaissance Technologies, Rock Springs Capital Management, and Fisher Asset Management were 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 Think Investments allocated the biggest weight to Insulet Corporation (NASDAQ:PODD), around 10.89% of its 13F portfolio. Coatue Management is also relatively very bullish on the stock, designating 3.02 percent of its 13F equity portfolio to PODD.
As one would reasonably expect, some big names were leading the bulls’ herd. Fisher Asset Management, managed by Ken Fisher, established the biggest position in Insulet Corporation (NASDAQ:PODD). Fisher Asset Management had $45 million invested in the company at the end of the quarter. Joseph Edelman’s Perceptive Advisors also initiated a $13.7 million position during the quarter. The other funds with brand new PODD positions are Dmitry Balyasny’s Balyasny Asset Management, Steve Cohen’s Point72 Asset Management, and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Insulet Corporation (NASDAQ:PODD) but similarly valued. These stocks are Occidental Petroleum Corporation (NYSE:OXY), Pembina Pipeline Corp (NYSE:PBA), Icahn Enterprises LP (NASDAQ:IEP), and Ingersoll Rand Inc. (NYSE:IR). This group of stocks’ market valuations match PODD’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OXY | 35 | 1384528 | -9 |
| PBA | 15 | 52363 | -2 |
| IEP | 3 | 9602364 | -1 |
| IR | 33 | 490015 | -14 |
| Average | 21.5 | 2882318 | -6.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.5 hedge funds with bullish positions and the average amount invested in these stocks was $2882 million. That figure was $648 million in PODD’s case. Occidental Petroleum Corporation (NYSE:OXY) is the most popular stock in this table. On the other hand Icahn Enterprises LP (NASDAQ:IEP) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Insulet Corporation (NASDAQ:PODD) is more popular among hedge funds. 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. Unfortunately PODD wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on PODD were disappointed as the stock returned 13.8% during the second quarter (through the end of May) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.
