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Is Cutera, Inc. (CUTR) A Good Stock To Buy?

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The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Cutera, Inc. (NASDAQ:CUTR).

Cutera, Inc. (NASDAQ:CUTR) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 11 hedge funds’ portfolios at the end of September, the same total at the end of June. 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 ProQR Therapeutics NV (NASDAQ:PRQR), Lawson Products, Inc. (NASDAQ:LAWS), and Black Diamond Inc (NASDAQ:BDE) to gather more data points.

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We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.

 d13/Shutterstock.com

d13/Shutterstock.com

What have hedge funds been doing with Cutera, Inc. (NASDAQ:CUTR)?

Heading into the fourth quarter of 2016, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, unchanged from the previous quarter. The graph below displays the number of hedge funds with bullish positions in CUTR over the last 5 quarters, which has dipped by 2 during 2016. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

CUTR Chart

Of the funds tracked by Insider Monkey, Renaissance Technologies, one of the largest hedge funds in the world, holds the biggest position in Cutera, Inc. (NASDAQ:CUTR). Renaissance Technologies has a $12.5 million position in the stock. The second largest stake is held by Voce Capital, led by J. Daniel Plants, holding an $8.7 million position; the fund has 11.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish consist of Brian C. Freckmann’s Lyon Street Capital, Mario Gabelli’s GAMCO Investors, and Craig A. Drill’s Craig Drill Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

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