We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Melvin Capital’s recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards Glaukos Corporation (NYSE:GKOS).
Glaukos Corporation (NYSE:GKOS) has seen an increase in hedge fund interest of late. Glaukos Corporation (NYSE:GKOS) was in 19 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 21. There were 18 hedge funds in our database with GKOS positions at the end of the first quarter. Our calculations also showed that GKOS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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 monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
With all of this in mind let’s take a gander at the latest hedge fund action regarding Glaukos Corporation (NYSE:GKOS).
Do Hedge Funds Think GKOS Is A Good Stock To Buy Now?
At Q2’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GKOS over the last 24 quarters. With hedgies’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies has the biggest position in Glaukos Corporation (NYSE:GKOS), worth close to $17 million, amounting to less than 0.1%% of its total 13F portfolio. On Renaissance Technologies’s heels is GLG Partners, managed by Noam Gottesman, which holds a $8.6 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Other professional money managers with similar optimism encompass Efrem Kamen’s Pura Vida Investments, Ken Griffin’s Citadel Investment Group and Peter Muller’s PDT Partners. In terms of the portfolio weights assigned to each position PDT Partners allocated the biggest weight to Glaukos Corporation (NYSE:GKOS), around 0.29% of its 13F portfolio. Rhenman & Partners Asset Management is also relatively very bullish on the stock, earmarking 0.2 percent of its 13F equity portfolio to GKOS.
As industrywide interest jumped, key hedge funds have jumped into Glaukos Corporation (NYSE:GKOS) headfirst. Bridgewater Associates, managed by Ray Dalio, initiated the most valuable position in Glaukos Corporation (NYSE:GKOS). Bridgewater Associates had $4 million invested in the company at the end of the quarter. Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management also made a $1 million investment in the stock during the quarter. The following funds were also among the new GKOS investors: Greg Eisner’s Engineers Gate Manager, Bruce Kovner’s Caxton Associates LP, and Jinghua Yan’s TwinBeech Capital.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Glaukos Corporation (NYSE:GKOS) but similarly valued. These stocks are Arconic Corporation (NYSE:ARNC), Korn Ferry (NYSE:KFY), Brighthouse Financial, Inc. (NASDAQ:BHF), ACADIA Pharmaceuticals Inc. (NASDAQ:ACAD), Cushman & Wakefield plc (NYSE:CWK), Ormat Technologies, Inc. (NYSE:ORA), and Freedom Holding Corp. (NASDAQ:FRHC). This group of stocks’ market values resemble GKOS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ARNC | 30 | 1000061 | 4 |
| KFY | 21 | 247721 | 5 |
| BHF | 26 | 494240 | -2 |
| ACAD | 21 | 1390015 | -12 |
| CWK | 23 | 245483 | 4 |
| ORA | 21 | 242956 | 4 |
| FRHC | 13 | 64432 | 1 |
| Average | 22.1 | 526415 | 0.6 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.1 hedge funds with bullish positions and the average amount invested in these stocks was $526 million. That figure was $51 million in GKOS’s case. Arconic Corporation (NYSE:ARNC) is the most popular stock in this table. On the other hand Freedom Holding Corp. (NASDAQ:FRHC) is the least popular one with only 13 bullish hedge fund positions. Glaukos Corporation (NYSE:GKOS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for GKOS is 50.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and surpassed the market again by 1.6 percentage points. Unfortunately GKOS wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); GKOS investors were disappointed as the stock returned -47.1% since the end of June (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Glaukos Corp (NYSE:GKOS)
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Disclosure: None. This article was originally published at Insider Monkey.
