Is AXGN A Good Stock To Buy Now?

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is AxoGen, Inc. (NASDAQ:AXGN), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

Is AXGN a good stock to buy now? AxoGen, Inc. (NASDAQ:AXGN) has seen an increase in hedge fund sentiment of late. AxoGen, Inc. (NASDAQ:AXGN) was in 15 hedge funds’ portfolios at the end of September. The all time high for this statistic is 22. Our calculations also showed that AXGN isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.

To the average investor there are plenty of methods investors can use to evaluate publicly traded companies. Some of the most under-the-radar methods are hedge fund and insider trading signals. Our researchers have shown that, historically, those who follow the top picks of the elite investment managers can trounce their index-focused peers by a significant amount (see the details here).

Donald Sussman Paloma Partners

Donald Sussman of Paloma Partners

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind let’s view the recent hedge fund action surrounding AxoGen, Inc. (NASDAQ:AXGN).

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

At the end of September, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 25% from the previous quarter. The graph below displays the number of hedge funds with bullish position in AXGN over the last 21 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Israel Englander’s Millennium Management has the largest position in AxoGen, Inc. (NASDAQ:AXGN), worth close to $14.7 million, corresponding to less than 0.1%% of its total 13F portfolio. On Millennium Management’s heels is D E Shaw, led by D. E. Shaw, holding a $8.8 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish consist of Josh Goldberg’s G2 Investment Partners Management, Warren Lammert’s Granite Point Capital and Guy Levy’s Soleus Capital. In terms of the portfolio weights assigned to each position G2 Investment Partners Management allocated the biggest weight to AxoGen, Inc. (NASDAQ:AXGN), around 1.67% of its 13F portfolio. Soleus Capital is also relatively very bullish on the stock, designating 0.83 percent of its 13F equity portfolio to AXGN.

Now, specific money managers have been driving this bullishness. Parkman Healthcare Partners, managed by Greg Martinez, created the most outsized position in AxoGen, Inc. (NASDAQ:AXGN). Parkman Healthcare Partners had $1.5 million invested in the company at the end of the quarter. Vishal Saluja and Pham Quang’s Endurant Capital Management also made a $0.8 million investment in the stock during the quarter. The other funds with brand new AXGN positions are Ken Griffin’s Citadel Investment Group, Greg Eisner’s Engineers Gate Manager, and Donald Sussman’s Paloma Partners.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as AxoGen, Inc. (NASDAQ:AXGN) but similarly valued. We will take a look at Applied Therapeutics, Inc. (NASDAQ:APLT), Brookdale Senior Living, Inc. (NYSE:BKD), Pacific Ethanol Inc (NASDAQ:PEIX), WisdomTree Investments, Inc. (NASDAQ:WETF), Renalytix AI plc (NASDAQ:RNLX), Trevena Inc (NASDAQ:TRVN), and Collectors Universe, Inc. (NASDAQ:CLCT). All of these stocks’ market caps match AXGN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
APLT 8 100284 -6
BKD 20 181384 -4
PEIX 11 81327 8
WETF 22 34490 4
RNLX 4 16709 4
TRVN 5 2318 -1
CLCT 11 65834 2
Average 11.6 68907 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.6 hedge funds with bullish positions and the average amount invested in these stocks was $69 million. That figure was $43 million in AXGN’s case. WisdomTree Investments, Inc. (NASDAQ:WETF) is the most popular stock in this table. On the other hand Renalytix AI plc (NASDAQ:RNLX) is the least popular one with only 4 bullish hedge fund positions. AxoGen, Inc. (NASDAQ:AXGN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AXGN is 59. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on AXGN as the stock returned 37.4% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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