How Did Hedge Funds’ Masimo Corporation (MASI) Bets Fare?

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. We at Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded Masimo Corporation (NASDAQ:MASI) and determine whether the smart money was really smart about this stock.

Masimo Corporation (NASDAQ:MASI) was in 31 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 35. MASI investors should be aware of an increase in hedge fund interest lately. There were 28 hedge funds in our database with MASI positions at the end of the second quarter. Our calculations also showed that MASI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind let’s review the fresh hedge fund action regarding Masimo Corporation (NASDAQ:MASI).

Do Hedge Funds Think MASI Is A Good Stock To Buy Now?

At Q3’s end, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards MASI over the last 25 quarters. With hedge funds’ sentiment swirling, there exists a few key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).

More specifically, D1 Capital Partners was the largest shareholder of Masimo Corporation (NASDAQ:MASI), with a stake worth $148.2 million reported as of the end of September. Trailing D1 Capital Partners was Fundsmith LLP, which amassed a stake valued at $117.8 million. Arrowstreet Capital, Blue Whale Capital, and Alyeska Investment Group 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 Blue Whale Capital allocated the biggest weight to Masimo Corporation (NASDAQ:MASI), around 3.8% of its 13F portfolio. Montanaro Asset Management is also relatively very bullish on the stock, setting aside 3.36 percent of its 13F equity portfolio to MASI.

Now, key money managers have jumped into Masimo Corporation (NASDAQ:MASI) headfirst. D1 Capital Partners, managed by Daniel Sundheim, initiated the most valuable position in Masimo Corporation (NASDAQ:MASI). D1 Capital Partners had $148.2 million invested in the company at the end of the quarter. Kamran Moghtaderi’s Eversept Partners also initiated a $18.1 million position during the quarter. The other funds with brand new MASI positions are Peter Muller’s PDT Partners, David Harding’s Winton Capital Management, and Ronald Hua’s Qtron Investments.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Masimo Corporation (NASDAQ:MASI) but similarly valued. We will take a look at Logitech International SA (NASDAQ:LOGI), FactSet Research Systems Inc. (NYSE:FDS), Huazhu Group Limited (NASDAQ:HTHT), Camden Property Trust (NYSE:CPT), LKQ Corporation (NASDAQ:LKQ), ABIOMED, Inc. (NASDAQ:ABMD), and KANZHUN LIMITED (NASDAQ:BZ). This group of stocks’ market values are similar to MASI’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.7 hedge funds with bullish positions and the average amount invested in these stocks was $880 million. That figure was $560 million in MASI’s case. LKQ Corporation (NASDAQ:LKQ) is the most popular stock in this table. On the other hand KANZHUN LIMITED (NASDAQ:BZ) is the least popular one with only 18 bullish hedge fund positions. Masimo Corporation (NASDAQ:MASI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MASI is 67.1. 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 positive signal but 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, MASI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MASI were disappointed as the stock returned -18.8% since the end of September (through 1/31) 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 all of these stocks already outperformed the market since 2019.

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