The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 867 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30th holdings, data that is available nowhere else. Should you consider Butterfly Network, Inc. (NYSE:BFLY) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is BFLY a good stock to buy? Butterfly Network, Inc. (NYSE:BFLY) was in 21 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 32. BFLY has seen a decrease in hedge fund interest in recent months. There were 24 hedge funds in our database with BFLY positions at the end of the second quarter. Our calculations also showed that BFLY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Frank Brosens of Taconic Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now let’s take a glance at the fresh hedge fund action regarding Butterfly Network, Inc. (NYSE:BFLY).
Do Hedge Funds Think BFLY Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -13% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BFLY over the last 25 quarters. So, let’s examine 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, ARK Investment Management, managed by Catherine D. Wood, holds the largest position in Butterfly Network, Inc. (NYSE:BFLY). ARK Investment Management has a $75.1 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Glenview Capital, managed by Larry Robbins, which holds a $51.8 million position; 0.9% of its 13F portfolio is allocated to the stock. Some other members of the smart money that hold long positions comprise Christopher James’s Partner Fund Management, David Fiszel’s Honeycomb Asset Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Glenview Capital allocated the biggest weight to Butterfly Network, Inc. (NYSE:BFLY), around 0.95% of its 13F portfolio. Ionic Capital Management is also relatively very bullish on the stock, designating 0.77 percent of its 13F equity portfolio to BFLY.
Seeing as Butterfly Network, Inc. (NYSE:BFLY) has faced falling interest from the smart money, it’s easy to see that there were a few hedge funds who sold off their full holdings last quarter. It’s worth mentioning that Andrew Kurita’s Kettle Hill Capital Management said goodbye to the biggest investment of all the hedgies followed by Insider Monkey, valued at close to $2.4 million in stock. Frank Brosens’s fund, Taconic Capital, also sold off its stock, about $1.1 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Butterfly Network, Inc. (NYSE:BFLY) but similarly valued. These stocks are Revolution Medicines, Inc. (NASDAQ:RVMD), Centerra Gold Inc. (NYSE:CGAU), Ping Identity Holding Corp. (NYSE:PING), Amarin Corporation plc (NASDAQ:AMRN), MFA Financial, Inc. (NYSE:MFA), Trustmark Corp (NASDAQ:TRMK), and CSW Industrials, Inc. (NASDAQ:CSWI). This group of stocks’ market valuations are closest to BFLY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| RVMD | 18 | 424635 | -11 |
| CGAU | 6 | 9388 | 6 |
| PING | 20 | 667754 | -3 |
| AMRN | 21 | 374884 | 0 |
| MFA | 17 | 167550 | -3 |
| TRMK | 7 | 11276 | -3 |
| CSWI | 14 | 37768 | 1 |
| Average | 14.7 | 241894 | -1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.7 hedge funds with bullish positions and the average amount invested in these stocks was $242 million. That figure was $188 million in BFLY’s case. Amarin Corporation plc (NASDAQ:AMRN) is the most popular stock in this table. On the other hand Centerra Gold Inc. (NYSE:CGAU) is the least popular one with only 6 bullish hedge fund positions. Butterfly Network, Inc. (NYSE:BFLY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BFLY is 71.7. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately BFLY wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BFLY were disappointed as the stock returned -35.9% since the end of September (through 12/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
