The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider ShockWave Medical, Inc. (NASDAQ:SWAV) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
ShockWave Medical, Inc. (NASDAQ:SWAV) shareholders have witnessed an increase in enthusiasm from smart money lately. Our calculations also showed that SWAV isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most investors, hedge funds are assumed to be slow, old investment tools of years past. While there are over 8000 funds in operation at present, We hone in on the masters of this group, approximately 750 funds. Most estimates calculate that this group of people preside over the lion’s share of the hedge fund industry’s total capital, and by monitoring their top picks, Insider Monkey has determined several investment strategies that have historically beaten the broader indices. Insider Monkey’s flagship short hedge fund strategy outpaced the S&P 500 short ETFs by around 20 percentage points per annum since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Jonathan Barrett of Luminus Management
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December we recommended Adams Energy based on an under-the-radar fund manager’s investor letter and the stock gained 20 percent. Let’s analyze the latest hedge fund action regarding ShockWave Medical, Inc. (NASDAQ:SWAV).
How have hedgies been trading ShockWave Medical, Inc. (NASDAQ:SWAV)?
At the end of the third quarter, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 43% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SWAV over the last 17 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Sectoral Asset Management, managed by Jerome Pfund and Michael Sjostrom, holds the most valuable position in ShockWave Medical, Inc. (NASDAQ:SWAV). Sectoral Asset Management has a $17.2 million position in the stock, comprising 3% of its 13F portfolio. The second most bullish fund manager is Luminus Management, managed by Jonathan Barrett and Paul Segal, which holds a $9.7 million position; 0.3% of its 13F portfolio is allocated to the company. Some other members of the smart money that are bullish contain Ken Griffin’s Citadel Investment Group, James A. Silverman’s Opaleye Management and Renaissance Technologies. In terms of the portfolio weights assigned to each position Sectoral Asset Management allocated the biggest weight to ShockWave Medical, Inc. (NASDAQ:SWAV), around 2.96% of its 13F portfolio. Opaleye Management is also relatively very bullish on the stock, earmarking 1.73 percent of its 13F equity portfolio to SWAV.
As industrywide interest jumped, key money managers have been driving this bullishness. Luminus Management, managed by Jonathan Barrett and Paul Segal, created the biggest position in ShockWave Medical, Inc. (NASDAQ:SWAV). Luminus Management had $9.7 million invested in the company at the end of the quarter. James A. Silverman’s Opaleye Management also made a $4.8 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Simon Sadler’s Segantii Capital, and John Osterweis’s Osterweis Capital Management.
Let’s also examine hedge fund activity in other stocks similar to ShockWave Medical, Inc. (NASDAQ:SWAV). These stocks are Washington Trust Bancorp Inc. (NASDAQ:WASH), FARO Technologies, Inc. (NASDAQ:FARO), HealthStream, Inc. (NASDAQ:HSTM), and Odonate Therapeutics, Inc. (NASDAQ:ODT). All of these stocks’ market caps are similar to SWAV’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WASH | 8 | 29820 | 1 |
| FARO | 8 | 47745 | 1 |
| HSTM | 11 | 41631 | -2 |
| ODT | 14 | 447024 | 1 |
| Average | 10.25 | 141555 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $142 million. That figure was $51 million in SWAV’s case. Odonate Therapeutics, Inc. (NASDAQ:ODT) is the most popular stock in this table. On the other hand Washington Trust Bancorp Inc. (NASDAQ:WASH) is the least popular one with only 8 bullish hedge fund positions. ShockWave Medical, Inc. (NASDAQ:SWAV) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on SWAV as the stock returned 30.8% during the first two months of Q4 and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
