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Does Penumbra Inc (PEN) Represent a Stock Worth Your Portfolio?

We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the government. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Penumbra Inc (NYSE:PEN) based on that data.

Is Penumbra Inc (NYSE:PEN) a sound investment now? Hedge funds are in an optimistic mood. The company went public at the end of September, and 13 funds from our database reported long positions in the latest round of 13F filings. Let’s take a closer look at the sentiment surrounding Penumbra. At the end of this article we will also compare PEN to other stocks, including Sonic Corporation (NASDAQ: SONC), Apollo Group Inc (NASDAQ:APOL), and Cott Corporation (USA) (NYSE:COT) to get a better sense of its popularity.

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At the moment there are plenty of gauges stock market investors use to value publicly traded companies. A duo of the most useful gauges are hedge fund and insider trading indicators. our experts have shown that, historically, those who follow the top picks of the top money managers can beat the S&P 500 by a solid amount (see the details here).

Keeping this in mind, we’re going to take a glance at the new action regarding Penumbra Inc (NYSE:PEN).

How have hedgies been trading Penumbra Inc (NYSE:PEN)?

According to Insider Monkey’s hedge fund database, Jeremy Green’s Redmile Group has the number one position in Penumbra Inc (NYSE:PEN), worth close to $51 million, accounting for 1.2% of its total 13F portfolio. The second most bullish fund manager is Partner Fund Management, led by Christopher James, holding a $15.3 million position; 0.4% of its 13F portfolio is allocated to the stock. Some other professional money managers with similar optimism include Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management, Nick Niell’s Arrowgrass Capital Partners and Phill Gross and Robert Atchinson’s Adage Capital Management.

Let’s now take a look at hedge fund activity in other stocks similar to Penumbra Inc (NYSE:PEN). We will take a look at Sonic Corporation (NASDAQ:SONC), Apollo Group Inc (NASDAQ:APOL), Cott Corporation (USA) (NYSE:COT), and Finisar Corporation (NASDAQ:FNSR). This group of stocks’ market values are similar to PEN’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
SONC 30.204992.6
APOL 25.324765.-2
COT 23.256133.4
FNSR 19.150631.0

As you can see these stocks had an average of 24 hedge funds with bullish positions and the average amount invested in these stocks was $234 million, versus $92 million in PEN’s case. Penumbra is the least popular stock from this group, which is not surprising, considering that it has just gone public. It managed to capture some attention, but its popularity depends on the momentum that the stock will gain in the following months. In any case, Penumbra may carry more risk than other stocks, taking into account that it is a relatively new publicly-traded company.

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