How Smart Money Is Trading Alphatec Holdings Inc (ATEC)

Since Alphatec Holdings Inc (NASDAQ:ATEC) has witnessed falling interest from the smart money, we can see that there lies a certain “tier” of hedge funds that slashed their full holdings by the end of the third quarter. Interestingly, Israel Englander’s Millennium Management cut the largest investment of the “upper crust” of funds followed by Insider Monkey, comprising an estimated $40,000 in stock, and Ken Griffin of Citadel Investment Group was right behind this move, as the fund dumped about $18,000 worth of shares. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds by the end of the third quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Alphatec Holdings Inc (NASDAQ:ATEC) but similarly valued. We will take a look at Dover Downs Gaming & Entertainment, Inc. (NYSE:DDE), On Track Innovations Ltd.(USA) (NASDAQ:OTIV), Cogentix Medical Inc (NASDAQ:CGNT), and Summer Infant, Inc. (NASDAQ:SUMR). This group of stocks’ market valuations are closest to ATEC’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DDE 4 862 0
OTIV 4 2450 1
CGNT 8 6588 0
SUMR 6 8188 1

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $4 million in ATEC’s case, which is not a positive sign. Cogentix Medical Inc (NASDAQ:CGNT) is the most popular stock in this table, while Dover Downs Gaming & Entertainment, Inc. (NYSE:DDE) is the least popular one with only 4 bullish hedge fund positions. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.