We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Melvin Capital’s recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Impinj, Inc. (NASDAQ:PI).
Impinj, Inc. (NASDAQ:PI) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 18 hedge funds’ portfolios at the end of the first quarter of 2021. Our calculations also showed that PI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare PI to other stocks including Theravance Biopharma Inc (NASDAQ:TBPH), Core Laboratories N.V. (NYSE:CLB), and Marcus & Millichap Inc (NYSE:MMI) to get a better sense of its popularity.
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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Richard Driehaus of Driehaus Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 homepage. With all of this in mind we’re going to take a peek at the new hedge fund action encompassing Impinj, Inc. (NASDAQ:PI).
Do Hedge Funds Think PI Is A Good Stock To Buy Now?
At Q1’s end, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards PI over the last 23 quarters. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
More specifically, Sylebra Capital Management was the largest shareholder of Impinj, Inc. (NASDAQ:PI), with a stake worth $250.1 million reported as of the end of March. Trailing Sylebra Capital Management was Toronado Partners, which amassed a stake valued at $36.8 million. D E Shaw, Driehaus Capital, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Toronado Partners allocated the biggest weight to Impinj, Inc. (NASDAQ:PI), around 11.94% of its 13F portfolio. Sylebra Capital Management is also relatively very bullish on the stock, dishing out 6.46 percent of its 13F equity portfolio to PI.
Since Impinj, Inc. (NASDAQ:PI) has witnessed a decline in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of hedgies who sold off their full holdings by the end of the first quarter. Intriguingly, Josh Goldberg’s G2 Investment Partners Management said goodbye to the largest investment of the “upper crust” of funds followed by Insider Monkey, comprising close to $2.1 million in stock, and Paul Marshall and Ian Wace’s Marshall Wace LLP was right behind this move, as the fund dumped about $0.5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Impinj, Inc. (NASDAQ:PI) but similarly valued. We will take a look at Theravance Biopharma Inc (NASDAQ:TBPH), Core Laboratories N.V. (NYSE:CLB), Marcus & Millichap Inc (NYSE:MMI), Sandstorm Gold Ltd. (NYSE:SAND), BP Midstream Partners LP (NYSE:BPMP), Golden Ocean Group Ltd (NASDAQ:GOGL), and S & T Bancorp Inc (NASDAQ:STBA). All of these stocks’ market caps are closest to PI’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TBPH | 12 | 377607 | -4 |
| CLB | 17 | 175714 | 5 |
| MMI | 14 | 74519 | 5 |
| SAND | 15 | 107584 | 1 |
| BPMP | 5 | 11202 | -1 |
| GOGL | 11 | 62138 | 5 |
| STBA | 2 | 1309 | 1 |
| Average | 10.9 | 115725 | 1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.9 hedge funds with bullish positions and the average amount invested in these stocks was $116 million. That figure was $428 million in PI’s case. Core Laboratories N.V. (NYSE:CLB) is the most popular stock in this table. On the other hand S & T Bancorp Inc (NASDAQ:STBA) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Impinj, Inc. (NASDAQ:PI) is more popular among hedge funds. Our overall hedge fund sentiment score for PI is 79.5. 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 28.5% in 2021 through July 23rd and still beat the market by 10.1 percentage points. Unfortunately PI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on PI were disappointed as the stock returned -24% since the end of the first quarter (through 7/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
