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Masimo Corporation (MASI): Are Hedge Funds Right About This Stock?

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At the moment, there are plenty of gauges market participants can use to monitor publicly traded companies. Some of the most under-the-radar are hedge fund and insider trading interest. At Insider Monkey, our research analyses have shown that, historically, those who follow the top picks of the best fund managers can trounce their index-focused peers by a significant margin (see just how much).

Masimo Corporation (NASDAQ:MASI)

Equally as useful, optimistic insider trading sentiment is a second way to analyze the financial markets. Just as you’d expect, there are lots of incentives for an insider to drop shares of his or her company, but only one, very clear reason why they would buy. Various empirical studies have demonstrated the market-beating potential of this tactic if investors know what to do (learn more here).

Keeping this in mind, it’s important to study the newest info for Masimo Corporation (NASDAQ:MASI).

What does the smart money think about Masimo Corporation (NASDAQ:MASI)?

At the end of the second quarter, a total of 13 of the hedge funds we track held long positions in this stock, a change of -24% from the previous quarter. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings meaningfully.

When using filings from the hedgies we track, Bares Capital Management, managed by Brian Bares, holds the most valuable position in Masimo Corporation (NASDAQ:MASI). Bares Capital Management has a $64.4 million position in the stock, comprising 6.3% of its 13F portfolio. Sitting at the No. 2 spot is Camber Capital Management, managed by Stephen DuBois, which held a $37.1 million position; 3.8% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include Jim Simons’s Renaissance Technologies, Kevin Kotler’s Broadfin Capital and Ken Griffin’s Citadel Investment Group.

Since Masimo Corporation (NASDAQ:MASI) has witnessed bearish sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of hedgies that decided to sell off their positions entirely in Q1. At the top of the heap, John Overdeck and David Siegel’s Two Sigma Advisors dropped the largest position of the “upper crust” of funds we watch, totaling an estimated $2.6 million in stock, and James E. Flynn of Deerfield Management was right behind this move, as the fund dropped about $1.4 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 4 funds in Q1.

Insider trading activity in Masimo Corporation (NASDAQ:MASI)

Legal insider trading, particularly when it’s bullish, is best served when the company in question has experienced transactions within the past six months. Over the last six-month time frame, Masimo Corporation (NASDAQ:MASI) has seen zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll go over the relationship between both of these indicators in other stocks similar to Masimo Corporation (NASDAQ:MASI). These stocks are Wright Medical Group Inc (NASDAQ:WMGI), CONMED Corporation (NASDAQ:CNMD), ArthroCare Corporation (NASDAQ:ARTC), Cyberonics, Inc. (NASDAQ:CYBX), and Volcano Corporation (NASDAQ:VOLC). This group of stocks belong to the medical appliances & equipment industry and their market caps resemble MASI’s market cap.

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