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Hedge Funds Aren’t Crazy About MAKO Surgical Corp. (MAKO) Anymore: The Spectranetics Corporation (SPNC), Symmetry Medical Inc. (SMA)

MAKO Surgical Corp. (NASDAQ:MAKO) was in 13 hedge funds’ portfolio at the end of December. MAKO investors should pay attention to a decrease in hedge fund interest lately. There were 13 hedge funds in our database with MAKO positions at the end of the previous quarter.

MAKO Surgical Corp. (NASDAQ:MAKO)

According to most market participants, hedge funds are perceived as unimportant, old investment vehicles of years past. While there are over 8000 funds in operation at present, we at Insider Monkey look at the upper echelon of this group, close to 450 funds. Most estimates calculate that this group has its hands on the majority of the smart money’s total capital, and by keeping an eye on their best picks, we have revealed a number of investment strategies that have historically beaten the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points a year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 25 percentage points in 6.5 month (explore the details and some picks here).

Just as key, bullish insider trading sentiment is a second way to break down the financial markets. Just as you’d expect, there are a variety of incentives for a bullish insider to drop shares of his or her company, but just one, very simple reason why they would behave bullishly. Several empirical studies have demonstrated the impressive potential of this method if shareholders understand what to do (learn more here).

With all of this in mind, it’s important to take a look at the recent action encompassing MAKO Surgical Corp. (NASDAQ:MAKO).

How are hedge funds trading MAKO Surgical Corp. (NASDAQ:MAKO)?

In preparation for this year, a total of 13 of the hedge funds we track were bullish in this stock, a change of 0% from the third quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of noteworthy hedge fund managers who were boosting their holdings considerably.

When looking at the hedgies we track, James E. Flynn’s Deerfield Management had the largest position in MAKO Surgical Corp. (NASDAQ:MAKO), worth close to $21 million, comprising 1.1% of its total 13F portfolio. Sitting at the No. 2 spot is Samuel Isaly of OrbiMed Advisors, with a $15 million position; 1.1% of its 13F portfolio is allocated to the stock. Some other peers that are bullish include Jacob Gottlieb’s Visium Asset Management, Glenn Russell Dubin’s Highbridge Capital Management and Kevin Kotler’s Broadfin Capital.

Because MAKO Surgical Corp. (NASDAQ:MAKO) has witnessed bearish sentiment from the smart money, logic holds that there lies a certain “tier” of money managers that slashed their positions entirely in Q4. It’s worth mentioning that Glenn J. Krevlin’s Glenhill Advisors cut the biggest investment of the 450+ funds we monitor, comprising an estimated $9 million in stock.. Donald Chiboucis’s fund, Columbus Circle Investors, also dropped its stock, about $7 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

What have insiders been doing with MAKO Surgical Corp. (NASDAQ:MAKO)?

Insider trading activity, especially when it’s bullish, is best served when the company in focus has seen transactions within the past six months. Over the last 180-day time frame, MAKO Surgical Corp. (NASDAQ:MAKO) has experienced 2 unique insiders purchasing, and zero insider sales (see the details of insider trades here).

Let’s also take a look at hedge fund and insider activity in other stocks similar to MAKO Surgical Corp. (NASDAQ:MAKO). These stocks are The Spectranetics Corporation (NASDAQ:SPNC), Symmetry Medical Inc. (NYSE:SMA), Invacare Corporation (NYSE:IVC), Cardiovascular Systems Inc (NASDAQ:CSII), and Given Imaging Ltd. (NASDAQ:GIVN). This group of stocks belong to the medical appliances & equipment industry and their market caps are similar to MAKO’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
The Spectranetics Corporation (NASDAQ:SPNC) 12 1 2
Symmetry Medical Inc. (NYSE:SMA) 9 0 2
Invacare Corporation (NYSE:IVC) 14 0 0
Cardiovascular Systems Inc (NASDAQ:CSII) 6 1 4
Given Imaging Ltd. (NASDAQ:GIVN) 9 0 0

With the results demonstrated by our research, retail investors must always monitor hedge fund and insider trading sentiment, and MAKO Surgical Corp. (NASDAQ:MAKO) shareholders fit into this picture quite nicely.

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