A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Neovasc Inc. (NASDAQ:NVCN).
Is Neovasc (NVCN) a good stock to buy now? NVCN investors should be aware of an increase in enthusiasm from smart money in recent months. Neovasc Inc. (NASDAQ:NVCN) was in 5 hedge funds’ portfolios at the end of September. The all time high for this statistics is 7. Our calculations also showed that NVCN isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
David Siegel of Two Sigma Advisors
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now we’re going to go over the fresh hedge fund action regarding Neovasc Inc. (NASDAQ:NVCN).
Hedge fund activity in Neovasc Inc. (NASDAQ:NVCN)
At Q3’s end, a total of 5 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in NVCN over the last 21 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Hal Mintz’s Sabby Capital has the largest position in Neovasc Inc. (NASDAQ:NVCN), worth close to $2.2 million, comprising 0.3% of its total 13F portfolio. The second most bullish fund manager is Magnetar Capital, led by Alec Litowitz and Ross Laser, holding a $1.9 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism include Sander Gerber’s Hudson Bay Capital Management, John Overdeck and David Siegel’s Two Sigma Advisors and Renaissance Technologies. In terms of the portfolio weights assigned to each position Sabby Capital allocated the biggest weight to Neovasc Inc. (NASDAQ:NVCN), around 0.32% of its 13F portfolio. Magnetar Capital is also relatively very bullish on the stock, dishing out 0.03 percent of its 13F equity portfolio to NVCN.
As aggregate interest increased, key money managers were leading the bulls’ herd. Renaissance Technologies, founded by Jim Simons, initiated the most valuable position in Neovasc Inc. (NASDAQ:NVCN). Renaissance Technologies had $0 million invested in the company at the end of the quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Neovasc Inc. (NASDAQ:NVCN). These stocks are Universal Stainless & Alloy Products (NASDAQ:USAP), Broadwind Inc. (NASDAQ:BWEN), IZEA Worldwide Inc. (NASDAQ:IZEA), AmeriServ Financial, Inc. (NASDAQ:ASRV), Gulf Island Fabrication, Inc. (NASDAQ:GIFI), Hallmark Financial Services, Inc. (NASDAQ:HALL), and LSB Industries, Inc. (NYSE:LXU). This group of stocks’ market caps match NVCN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| USAP | 7 | 9992 | 1 |
| BWEN | 7 | 5334 | 3 |
| IZEA | 1 | 22 | 0 |
| ASRV | 3 | 4529 | 0 |
| GIFI | 6 | 6449 | -1 |
| HALL | 7 | 2053 | -3 |
| LXU | 7 | 4494 | -3 |
| Average | 5.4 | 4696 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.4 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $5 million in NVCN’s case. Universal Stainless & Alloy Products (NASDAQ:USAP) is the most popular stock in this table. On the other hand IZEA Worldwide Inc. (NASDAQ:IZEA) is the least popular one with only 1 bullish hedge fund positions. Neovasc Inc. (NASDAQ:NVCN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NVCN is 60.8. 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 negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and surpassed the market again by 16.1 percentage points. Unfortunately NVCN wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); NVCN investors were disappointed as the stock returned -61.2% since the end of September (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 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.
