The Stock Picks of This Obscure Hedge Fund Returned 70.5% In 2015; See What It’s Betting On in 2016

#2 NxStage Medical, Inc. (NASDAQ:NXTM)

– Shares Owned by DAFNA Capital Management (as of December 31): 366,554

– Value of Holding (as of December 31): $8.03 million

The 39% rise in NxStage Medical, Inc. (NASDAQ:NXTM)’s stock during the fourth quarter propelled it to the second spot in DAFNA Capital Management’s equity portfolio by the end of December, during which time the fund didn’t make any changes to its stake in the company. However, this year the stock has given up all of those gains it accumulated during the fourth quarter and is trading down by 32% year-to-date. Most of those declines have come after the company reported its fourth quarter financial results, despite the revenue of $89.80 million that NxStage Medical, Inc. (NASDAQ:NXTM) reported for the quarter coming in above analysts’ consensus estimate of $86.83 million, while its loss of $0.04 per share was in-line with expectations. For the first quarter, the company guided revenue to be in the range of $87 million-to-$89 million, while anticipating a net loss of $2 million-to-$4 million range. On February 23, analysts at Piper Jaffray reiterated their ‘Overweight’ rating on the stock, while reducing their price target on it to $23 from $24. James E. Flynn‘s Deerfield Management reduced its holding in the company by 28% to nearly 4.59 million shares during the October-to-December period.

#1 AtriCure Inc. (NASDAQ:ATRC)

– Shares Owned by DAFNA Capital Management (as of December 31): 487,946

– Value of Holding (as of December 31): $10.95 million

With DAFNA Capital Management’s stake in AtriCure Inc. (NASDAQ:ATRC) remaining unchanged during the fourth quarter, the position held on to the top spot in the fund’s portfolio going into 2016. Though the company recently gave good news to its shareholders by announcing that the Japanese Ministry of Health, Labour and Welfare has approved its AtriClip products, its shares failed to take off and currently trade down by 26.16% year-to-date. On February 25, AtriCure Inc. (NASDAQ:ATRC) reported a loss of $0.36 per share on revenue of $35.90 million. For the same quarter of the previous financial year, it reported a loss of $0.20 per share on revenue of $29.40 million. Despite the heavy decline in the stock, AtriCure Inc.  currently sports a ‘Buy’ rating from seven of the eight prominent analysts who cover it, with them having an average price target of $25.75 on it, which signifies upside potential of over 50%. Efrem Kamen‘s Pura Vida Investments was one of the hedge funds that initiated a stake in the company during the fourth quarter; it held 48,450 shares of AtriCure as of December 31.

Disclosure: None