The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on March 31st, about a week after the S&P 500 Index bottomed. We at Insider Monkey have made an extensive database of more than 821 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded SeaSpine Holdings Corp (NASDAQ:SPNE) based on those filings.
Is SeaSpine Holdings Corp (NASDAQ:SPNE) a superb investment today? Hedge funds are turning bullish. The number of long hedge fund positions advanced by 9 lately. Our calculations also showed that SPNE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s take a gander at the key hedge fund action surrounding SeaSpine Holdings Corp (NASDAQ:SPNE).
How are hedge funds trading SeaSpine Holdings Corp (NASDAQ:SPNE)?
At Q1’s end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 90% from the previous quarter. On the other hand, there were a total of 8 hedge funds with a bullish position in SPNE a year ago. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
Among these funds, Driehaus Capital held the most valuable stake in SeaSpine Holdings Corp (NASDAQ:SPNE), which was worth $11.2 million at the end of the third quarter. On the second spot was Hawk Ridge Management which amassed $5.7 million worth of shares. Renaissance Technologies, Stonepine Capital, and Parkman Healthcare Partners were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Stonepine Capital allocated the biggest weight to SeaSpine Holdings Corp (NASDAQ:SPNE), around 2.19% of its 13F portfolio. Hawk Ridge Management is also relatively very bullish on the stock, setting aside 0.96 percent of its 13F equity portfolio to SPNE.
Consequently, key money managers have jumped into SeaSpine Holdings Corp (NASDAQ:SPNE) headfirst. Driehaus Capital, managed by Richard Driehaus, created the most valuable position in SeaSpine Holdings Corp (NASDAQ:SPNE). Driehaus Capital had $11.2 million invested in the company at the end of the quarter. Timothy P. Lynch’s Stonepine Capital also initiated a $2.1 million position during the quarter. The following funds were also among the new SPNE investors: Paul Marshall and Ian Wace’s Marshall Wace LLP, Anand Parekh’s Alyeska Investment Group, and Greg Eisner’s Engineers Gate Manager.
Let’s also examine hedge fund activity in other stocks similar to SeaSpine Holdings Corp (NASDAQ:SPNE). We will take a look at GigCapital2, Inc. (NASDAQ:GIX), Daktronics, Inc. (NASDAQ:DAKT), Spark Energy, Inc. (NASDAQ:SPKE), and Siebert Financial Corp. (NASDAQ:SIEB). This group of stocks’ market caps match SPNE’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $16 million. That figure was $32 million in SPNE’s case. Daktronics, Inc. (NASDAQ:DAKT) is the most popular stock in this table. On the other hand Siebert Financial Corp. (NASDAQ:SIEB) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks SeaSpine Holdings Corp (NASDAQ:SPNE) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 13.4% in 2020 through June 22nd but still managed to beat the market by 15.9 percentage points. Hedge funds were also right about betting on SPNE as the stock returned 41.5% so far in Q2 (through June 22nd) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.