We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of SeaSpine Holdings Corp (NASDAQ:SPNE) based on that data.
Is SeaSpine Holdings Corp (NASDAQ:SPNE) undervalued? Hedge funds are getting more bullish. The number of bullish hedge fund bets went up by 1 recently. Our calculations also showed that SPNE isn’t among the 30 most popular stocks among hedge funds. SPNE was in 6 hedge funds’ portfolios at the end of the third quarter of 2018. There were 5 hedge funds in our database with SPNE positions at the end of the previous quarter.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (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 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We’re going to check out the new hedge fund action regarding SeaSpine Holdings Corp (NASDAQ:SPNE).
Hedge fund activity in SeaSpine Holdings Corp (NASDAQ:SPNE)
At Q3’s end, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the second quarter of 2018. By comparison, 7 hedge funds held shares or bullish call options in SPNE heading into this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to Insider Monkey’s hedge fund database, Hawk Ridge Management, managed by David Brown, holds the number one position in SeaSpine Holdings Corp (NASDAQ:SPNE). Hawk Ridge Management has a $6.7 million position in the stock, comprising 1.5% of its 13F portfolio. Coming in second is Renaissance Technologies, managed by Jim Simons, which holds a $6.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other members of the smart money with similar optimism include Chuck Royce’s Royce & Associates, Kamran Moghtaderi’s Eversept Partners and Israel Englander’s Millennium Management.
There weren’t any hedge funds initiating brand new positions in the stock during the third quarter.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as SeaSpine Holdings Corp (NASDAQ:SPNE) but similarly valued. We will take a look at Strongbridge Biopharma plc (NASDAQ:SBBP), Aerohive Networks Inc (NYSE:HIVE), Bassett Furniture Industries Inc. (NASDAQ:BSET), and NACCO Industries, Inc. (NYSE:NC). This group of stocks’ market values match SPNE’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SBBP | 19 | 76087 | -1 |
| HIVE | 13 | 32404 | 1 |
| BSET | 12 | 58349 | 1 |
| NC | 8 | 10309 | 0 |
| Average | 13 | 44287 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13 hedge funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $14 million in SPNE’s case. Strongbridge Biopharma plc (NASDAQ:SBBP) is the most popular stock in this table. On the other hand NACCO Industries, Inc. (NYSE:NC) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks SeaSpine Holdings Corp (NASDAQ:SPNE) is even less popular than NC. 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 warranted.
Disclosure: None. This article was originally published at Insider Monkey.
