Spectranetics Corp (SPNC)Hedge Funds Are Snapping Up

Hedge fund managers like David Einhorn, Dan Loeb, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Spectranetics Corp (NASDAQ:SPNC).

Is Spectranetics Corp (NASDAQ:SPNC) worth your attention right now? Prominent investors are becoming more confident. The number of bullish hedge fund positions rose by 7 recently. 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 Sun Hydraulics Corporation (NASDAQ:SNHY), Unit Corporation (NYSE:UNT), and Caretrus REIT Inc (NASDAQ:CTRE) to gather more data points.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Keeping this in mind, we’re going to take a look at the fresh action surrounding Spectranetics Corp (NASDAQ:SPNC).

How are hedge funds trading Spectranetics Corp (NASDAQ:SPNC)?

Heading into the fourth quarter of 2016, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a boost of 39% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Millennium Management, led by Israel Englander, holds the biggest position in Spectranetics Corp (NASDAQ:SPNC). According to regulatory filings, the fund has a $31 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Polar Capital, managed by Brian Ashford-Russell and Tim Woolley, which holds a $27.8 million position; 0.5% of its 13F portfolio is allocated to the company. Other hedge funds and institutional investors that are bullish consist of Phill Gross and Robert Atchinson’s Adage Capital Management, Justin John Ferayorni’s Tamarack Capital Management and Ken Greenberg and David Kim’s Ghost Tree Capital.

As one would reasonably expect, key hedge funds were leading the bulls’ herd. Columbus Circle Investors, managed by Principal Global Investors, established the biggest position in Spectranetics Corp (NASDAQ:SPNC). The fund reportedly had $9.1 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $2.9 million investment in the stock during the quarter. The other funds with new positions in the stock are David Costen Haley’s HBK Investments, Peter Muller’s PDT Partners, and Israel Englander’s Millennium Management.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Spectranetics Corp (NASDAQ:SPNC) but similarly valued. These stocks are Sun Hydraulics Corporation (NASDAQ:SNHY), Unit Corporation (NYSE:UNT), Caretrus REIT Inc (NASDAQ:CTRE), and Solaredge Technologies Inc (NASDAQ:SEDG). This group of stocks’ market caps match SPNC’s market cap.

As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $87 million. That figure was $160 million in SPNC’s case. Unit Corporation (NYSE:UNT) is the most popular stock in this table. On the other hand Sun Hydraulics Corporation (NASDAQ:SNHY) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks Spectranetics Corp (NASDAQ:SPNC) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: none.