Is Masimo Corporation (NASDAQ:MASI) a good equity to bet on right now? We like to check what the smart money thinks first before doing extensive research. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to find the latest market-moving information.
Is Masimo Corporation (NASDAQ:MASI) worth your attention right now? Investors who are in the know are becoming more confident. The number of bullish hedge fund bets advanced by four recently. 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 Kinross Gold Corporation (USA) (NYSE:KGC), Hilltop Holdings Inc. (NYSE:HTH), and Barnes Group Inc. (NYSE:B) to gather more data points.
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In the eyes of most shareholders, hedge funds are viewed as unimportant, old financial vehicles of yesteryear. While there are over 8,000 funds in operation today, our researchers look at the bigwigs of this club, about 700 funds. It is estimated that this group of investors administer most of all hedge funds’ total capital, and by keeping an eye on their finest stock picks, Insider Monkey has come up with numerous investment strategies that have historically surpassed Mr. Market. Insider Monkey’s small-cap hedge fund strategy surpassed the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Keeping this in mind, we’re going to check out the fresh action surrounding Masimo Corporation (NASDAQ:MASI).
How have hedgies been trading Masimo Corporation (NASDAQ:MASI)?
At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were bullish on this stock, a rise of 21% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Camber Capital Management, managed by Stephen DuBois, holds the number one position in Masimo Corporation (NASDAQ:MASI). Camber Capital Management has a $38.6 million position in the stock, comprising 3.3% of its 13F portfolio. On Camber Capital Management’s heels is D E Shaw, holding a $24.5 million position; less than 0.1% of its 13F portfolio is allocated to the stock. Other members of the smart money that are bullish contain Kevin Kotler’s Broadfin Capital, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Chuck Royce’s Royce & Associates.
Consequently, key money managers have been driving this bullishness. Broadfin Capital established the most outsized position in Masimo Corporation (NASDAQ:MASI). Broadfin Capital had $16.3 million invested in the company at the end of the quarter. Neil Chriss’ Hutchin Hill Capital also initiated a $1.4 million position during the quarter. The following funds were also among the new Masimo investors: David Costen Haley’s HBK Investments, Paul Tudor Jones’ Tudor Investment Corp, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Masimo Corporation (NASDAQ:MASI) but similarly valued. These stocks are Kinross Gold Corporation (USA) (NYSE:KGC), Hilltop Holdings Inc. (NYSE:HTH), Barnes Group Inc. (NYSE:B), and Globus Medical Inc (NYSE:GMED). This group of stocks’ market valuations resemble MASI’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KGC | 21 | 148374 | -2 |
| HTH | 19 | 49050 | -2 |
| B | 13 | 57419 | -6 |
| GMED | 23 | 85088 | 3 |
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $85 million. That figure was $124 million in Masimo’s case. Globus Medical Inc (NYSE:GMED) is the most popular stock in this table. On the other hand, Barnes Group Inc. (NYSE:B) is the least popular one with only 13 bullish hedge fund positions. Masimo Corporation (NASDAQ:MASI) is somewhere in the middle; it 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 Globus Medical might be a better candidate to consider a long position in.
