Should I Buy Stratasys, Ltd. (SSYS)?

In this article we will check out the progression of hedge fund sentiment towards Stratasys, Ltd. (NASDAQ:SSYS) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Hedge fund interest in Stratasys, Ltd. (NASDAQ:SSYS) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that SSYS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). At the end of this article we will also compare SSYS to other stocks including The Liberty Braves Group (NASDAQ:BATRA), James River Group Holdings Ltd (NASDAQ:JRVR), and Tremor Video Inc (NASDAQ:TRMR) to get a better sense of its popularity.

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. With all of this in mind we’re going to analyze the recent hedge fund action encompassing Stratasys, Ltd. (NASDAQ:SSYS).

Cathie Wood of ARK Investment Management

Do Hedge Funds Think SSYS 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 were long this stock, a change of 0% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards SSYS over the last 25 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, ARK Investment Management, managed by Catherine D. Wood, holds the biggest position in Stratasys, Ltd. (NASDAQ:SSYS). ARK Investment Management has a $155.6 million position in the stock, comprising 0.4% of its 13F portfolio. The second most bullish fund manager is John Overdeck and David Siegel of Two Sigma Advisors, with a $23.1 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining professional money managers that hold long positions contain D. E. Shaw’s D E Shaw, Renaissance Technologies and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Symmetry Peak Management allocated the biggest weight to Stratasys, Ltd. (NASDAQ:SSYS), around 1.14% of its 13F portfolio. Cinctive Capital Management is also relatively very bullish on the stock, dishing out 0.54 percent of its 13F equity portfolio to SSYS.

Because Stratasys, Ltd. (NASDAQ:SSYS) has witnessed bearish sentiment from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of hedgies that elected to cut their full holdings in the third quarter. Intriguingly, Dmitry Balyasny’s Balyasny Asset Management said goodbye to the biggest stake of the 750 funds followed by Insider Monkey, valued at an estimated $4.8 million in stock. Ryan Tolkin (CIO)’s fund, Schonfeld Strategic Advisors, also dumped its stock, about $1 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Stratasys, Ltd. (NASDAQ:SSYS) but similarly valued. These stocks are The Liberty Braves Group (NASDAQ:BATRA), James River Group Holdings Ltd (NASDAQ:JRVR), Tremor International Ltd (NASDAQ:TRMR), Purple Innovation, Inc. (NASDAQ:PRPL), Materion Corp (NYSE:MTRN), Conduent Incorporated (NASDAQ:CNDT), and Volta Inc. (NYSE:VLTA). This group of stocks’ market valuations resemble SSYS’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.1 hedge funds with bullish positions and the average amount invested in these stocks was $178 million. That figure was $270 million in SSYS’s case. Conduent Incorporated (NASDAQ:CNDT) is the most popular stock in this table. On the other hand The Liberty Braves Group (NASDAQ:BATRA) is the least popular one with only 11 bullish hedge fund positions. Stratasys, Ltd. (NASDAQ:SSYS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SSYS is 64.6. 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. 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 still beat the market by 3.6 percentage points. Hedge funds were also right about betting on SSYS as the stock returned 13.8% since the end of Q3 (through 12/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.