It is already common knowledge that individual investors do not usually have the necessary resources and abilities to properly research an investment opportunity. As a result, most investors pick their illusory “winners” by making a superficial analysis and research that leads to poor performance on aggregate. The Standard and Poor’s 500 Index returned 5.2% over the 12-month period ending October 30, while more than 51% of the constituents of the index underperformed the benchmark. Hence, a random stock picking process will most likely lead to disappointment. At the same time, the 30 most favored S&P 500 stocks by the hedge funds monitored by Insider Monkey (as of September 2014) generated a return of 9.5% over the same time span, with 63% of these stocks outperforming the benchmark. Of course, hedge funds do make wrong bets on some occasions and these get disproportionately publicized on financial media, but piggybacking their moves can beat the broader market on average. That’s why we are going to go over recent hedge fund activity in Invivo Therapeutics Holdings Corp (NASDAQ:NVIV).
Invivo Therapeutics Holdings Corp (NASDAQ:NVIV) was in 4 hedge funds’ portfolios at the end of the third quarter of 2015. NVIV has seen an increase in hedge fund sentiment recently. There were 2 hedge funds in our database with NVIV holdings 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 Vectrus Inc (NYSE:VEC), eHealth, Inc. (NASDAQ:EHTH), and OvaScience Inc (NASDAQ:OVAS) to gather more data points.
Follow Invivo Therapeutics Holdings Corp. (NASDAQ:NVIV)
Follow Invivo Therapeutics Holdings Corp. (NASDAQ:NVIV)
In the financial world there are dozens of gauges stock traders have at their disposal to grade publicly traded companies. A pair of the most underrated gauges are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the best picks of the best investment managers can outpace their index-focused peers by a superb amount (see the details here).
With all of this in mind, we’re going to check out the key action surrounding Invivo Therapeutics Holdings Corp (NASDAQ:NVIV).
How have hedgies been trading Invivo Therapeutics Holdings Corp (NASDAQ:NVIV)?
At the end of the third quarter, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 100% from the previous quarter. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Sabby Capital, managed by Hal Mintz, holds the biggest position in Invivo Therapeutics Holdings Corp (NASDAQ:NVIV). Sabby Capital has an $2.2 million call position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, led by Israel Englander, holding an $0.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism include Matthew Hulsizer’s PEAK6 Capital Management, and Ken Griffin’s Citadel Investment Group.
With a general bullishness amongst the heavyweights, specific money managers have jumped into Invivo Therapeutics Holdings Corp (NASDAQ:NVIV) headfirst. Sabby Capital, managed by Hal Mintz, established the largest call position in Invivo Therapeutics Holdings Corp (NASDAQ:NVIV). Sabby Capital had $2.2 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $0.2 million position during the quarter. The other funds with new positions in the stock are Matthew Hulsizer’s PEAK6 Capital Management and Ken Griffin’s Citadel Investment Group.
Let’s go over hedge fund activity in other stocks similar to Invivo Therapeutics Holdings Corp (NASDAQ:NVIV). We will take a look at Vectrus Inc (NYSE:VEC), eHealth, Inc. (NASDAQ:EHTH), OvaScience Inc (NASDAQ:OVAS), and Bel Fuse, Inc. (NASDAQ:BELFB). This group of stocks’ market caps match NVIV’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VEC | 10 | 11211 | -2 |
| EHTH | 15 | 87458 | 3 |
| OVAS | 13 | 46912 | -1 |
| BELFB | 11 | 13713 | 4 |
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $40 million. That figure was just $3 million in NVIV’s case. eHealth, Inc. (NASDAQ:EHTH) is the most popular stock in this table. On the other hand Vectrus Inc (NYSE:VEC) is the least popular one with only 10 bullish hedge fund positions. Compared to these stocks Invivo Therapeutics Holdings Corp (NASDAQ:NVIV) is even less popular than VEC. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is required.