Hedge Funds Are Dumping Intuitive Surgical, Inc. (ISRG)

Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds and investors’ positions as of the end of the third quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of Intuitive Surgical, Inc. (NASDAQ:ISRG) based on that data.

Is Intuitive Surgical, Inc. (NASDAQ:ISRG) a buy right now? Money managers are becoming less confident. The number of long hedge fund positions decreased by 1 recently. Our calculations also showed that ISRG isn’t among the 30 most popular stocks among hedge funds. ISRG was in 44 hedge funds’ portfolios at the end of September. There were 45 hedge funds in our database with ISRG positions at the end of the previous quarter.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 6.3% year to date (through December 3rd) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 18 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.


We’re going to review the key hedge fund action encompassing Intuitive Surgical, Inc. (NASDAQ:ISRG).

How have hedgies been trading Intuitive Surgical, Inc. (NASDAQ:ISRG)?

At the end of the third quarter, a total of 44 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -2% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ISRG over the last 13 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

No of Hedge Funds with ISRG Positions

The largest stake in Intuitive Surgical, Inc. (NASDAQ:ISRG) was held by Renaissance Technologies, which reported holding $391.8 million worth of stock at the end of September. It was followed by Millennium Management with a $334.2 million position. Other investors bullish on the company included Citadel Investment Group, Arrowstreet Capital, and AQR Capital Management.

Because Intuitive Surgical, Inc. (NASDAQ:ISRG) has experienced a decline in interest from the aggregate hedge fund industry, it’s safe to say that there lies a certain “tier” of funds that decided to sell off their entire stakes last quarter. Intriguingly, Lee Ainslie’s Maverick Capital dumped the biggest investment of the 700 funds monitored by Insider Monkey, valued at an estimated $10.5 million in stock, and Matthew Hulsizer’s PEAK6 Capital Management was right behind this move, as the fund said goodbye to about $2.8 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 1 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Intuitive Surgical, Inc. (NASDAQ:ISRG). These stocks are Allergan plc (NYSE:AGN), China Life Insurance Company Ltd. (NYSE:LFC), American Tower Corporation (NYSE:AMT), and VMware, Inc. (NYSE:VMW). This group of stocks’ market valuations match ISRG’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AGN 62 5149613 4
LFC 10 53288 0
AMT 42 2904624 3
VMW 38 2366199 1
Average 38 2618431 2

View table here if you experience formatting issues.

As you can see these stocks had an average of 38 hedge funds with bullish positions and the average amount invested in these stocks was $2.62 billion. That figure was $2.25 billion in ISRG’s case. Allergan plc (NYSE:AGN) is the most popular stock in this table. On the other hand China Life Insurance Company Ltd. (NYSE:LFC) is the least popular one with only 10 bullish hedge fund positions. Intuitive Surgical, Inc. (NASDAQ:ISRG) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard AGN might be a better candidate to consider a long position.

Disclosure: None. This article was originally published at Insider Monkey.