Hedge Funds Never Been Less Bullish On Endologix, Inc. (ELGX)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. What do these smart investors think about Endologix, Inc. (NASDAQ:ELGX)?

Endologix, Inc. (NASDAQ:ELGX) was in 4 hedge funds’ portfolios at the end of the first quarter of 2020. ELGX investors should be aware of a decrease in hedge fund interest in recent months. There were 5 hedge funds in our database with ELGX holdings at the end of the previous quarter. Our calculations also showed that ELGX 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.

If you’d ask most investors, hedge funds are seen as underperforming, outdated financial tools of years past. While there are more than 8000 funds with their doors open at the moment, We look at the leaders of this club, about 850 funds. These money managers preside over the majority of the hedge fund industry’s total asset base, and by tailing their inimitable investments, Insider Monkey has spotted a few investment strategies that have historically exceeded the broader indices. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

James Flynn Deerfield Management

James E. Flynn of Deerfield Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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. Now let’s analyze the recent hedge fund action encompassing Endologix, Inc. (NASDAQ:ELGX).

Hedge fund activity in Endologix, Inc. (NASDAQ:ELGX)

At Q1’s end, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -20% from the previous quarter. On the other hand, there were a total of 6 hedge funds with a bullish position in ELGX a year ago. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).

Is ELGX A Good Stock To Buy?

Of the funds tracked by Insider Monkey, James E. Flynn’s Deerfield Management has the number one position in Endologix, Inc. (NASDAQ:ELGX), worth close to $0.7 million, amounting to less than 0.1%% of its total 13F portfolio. The second most bullish fund manager is Renaissance Technologies,  which holds a $0.5 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions include Jeremy Green’s Redmile Group, Israel Englander’s Millennium Management and . In terms of the portfolio weights assigned to each position Deerfield Management allocated the biggest weight to Endologix, Inc. (NASDAQ:ELGX), around 0.02% of its 13F portfolio. Redmile Group is also relatively very bullish on the stock, designating 0.0015 percent of its 13F equity portfolio to ELGX.

Judging by the fact that Endologix, Inc. (NASDAQ:ELGX) has experienced declining sentiment from the entirety of the hedge funds we track, it’s easy to see that there lies a certain “tier” of funds that decided to sell off their entire stakes by the end of the third quarter. It’s worth mentioning that Christopher James’s Partner Fund Management sold off the biggest position of the 750 funds monitored by Insider Monkey, worth close to $0.3 million in stock, and D. E. Shaw’s D E Shaw was right behind this move, as the fund sold off about $0.2 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 1 funds by the end of the third quarter.

Let’s now review hedge fund activity in other stocks similar to Endologix, Inc. (NASDAQ:ELGX). These stocks are Genetic Technologies Limited (NASDAQ:GENE), SIFCO Industries, Inc. (NYSE:SIF), BSQUARE Corporation (NASDAQ:BSQR), and Coffee Holding Co., Inc. (NASDAQ:JVA). This group of stocks’ market valuations are similar to ELGX’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GENE 1 321 0
SIF 4 1161 0
BSQR 1 882 -1
JVA 2 1545 -1
Average 2 977 -0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 2 hedge funds with bullish positions and the average amount invested in these stocks was $1 million. That figure was $1 million in ELGX’s case. SIFCO Industries, Inc. (NYSE:SIF) is the most popular stock in this table. On the other hand Genetic Technologies Limited (NASDAQ:GENE) is the least popular one with only 1 bullish hedge fund positions. Endologix, Inc. (NASDAQ:ELGX) 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. 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 gained 8.3% in 2020 through the end of May but beat the market by 13.2 percentage points. Unfortunately ELGX wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on ELGX were disappointed as the stock returned 6.6% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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