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Intersect ENT Inc (XENT): Hedge Funds Are Reducing Their Exposure

Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Intersect ENT Inc (NASDAQ:XENT).

Intersect ENT Inc (NASDAQ:XENT) investors should be aware of a decrease in support from the world’s most elite money managers recently. XENT was in 20 hedge funds’ portfolios at the end of March. There were 21 hedge funds in our database with XENT positions at the end of the previous quarter. Our calculations also showed that XENT 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.

In today’s marketplace there are tons of formulas investors put to use to appraise their stock investments. Two of the less utilized formulas are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the elite money managers can trounce the market by a solid margin (see the details here).

James Flynn Deerfield Management

James E. Flynn of Deerfield Management

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 take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. 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 view the new hedge fund action regarding Intersect ENT Inc (NASDAQ:XENT).

What have hedge funds been doing with Intersect ENT Inc (NASDAQ:XENT)?

Heading into the second quarter of 2020, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the fourth quarter of 2019. On the other hand, there were a total of 23 hedge funds with a bullish position in XENT a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Deerfield Management was the largest shareholder of Intersect ENT Inc (NASDAQ:XENT), with a stake worth $32.7 million reported as of the end of September. Trailing Deerfield Management was Polar Capital, which amassed a stake valued at $11.4 million. Pura Vida Investments, Rock Springs Capital Management, and Adage Capital Management 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 Pura Vida Investments allocated the biggest weight to Intersect ENT Inc (NASDAQ:XENT), around 2.06% of its 13F portfolio. Deerfield Management is also relatively very bullish on the stock, earmarking 1.04 percent of its 13F equity portfolio to XENT.

Since Intersect ENT Inc (NASDAQ:XENT) has experienced bearish sentiment from hedge fund managers, logic holds that there lies a certain “tier” of funds who sold off their positions entirely heading into Q4. Intriguingly, Arthur B Cohen and Joseph Healey’s Healthcor Management LP dropped the largest position of the 750 funds tracked by Insider Monkey, comprising an estimated $63.2 million in stock, and Steve Cohen’s Point72 Asset Management was right behind this move, as the fund cut about $39 million worth. These moves are interesting, as total hedge fund interest fell by 1 funds heading into Q4.

Let’s check out hedge fund activity in other stocks similar to Intersect ENT Inc (NASDAQ:XENT). We will take a look at The Hackett Group, Inc. (NASDAQ:HCKT), AnaptysBio, Inc. (NASDAQ:ANAB), The Marcus Corporation (NYSE:MCS), and Par Pacific Holdings, Inc. (NYSE:PARR). This group of stocks’ market caps resemble XENT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HCKT 18 87972 2
ANAB 25 231710 -2
MCS 14 19830 -1
PARR 18 48678 0
Average 18.75 97048 -0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $97 million. That figure was $77 million in XENT’s case. AnaptysBio, Inc. (NASDAQ:ANAB) is the most popular stock in this table. On the other hand The Marcus Corporation (NYSE:MCS) is the least popular one with only 14 bullish hedge fund positions. Intersect ENT Inc (NASDAQ:XENT) 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 12.2% in 2020 through June 17th but beat the market by 14.8 percentage points. Unfortunately XENT wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on XENT were disappointed as the stock returned 2.8% 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.