Is Axonics Inc. (AXNX) A Good Stock To Buy?

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 have processed the filings of the more than 873 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their June 30th holdings, data that is available nowhere else. Should you consider Axonics Inc. (NASDAQ:AXNX) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is AXNX a good stock to buy? The best stock pickers were turning bullish. The number of long hedge fund positions rose by 6 in recent months. Axonics Inc. (NASDAQ:AXNX) was in 22 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic is 28. Our calculations also showed that AXNX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 16 hedge funds in our database with AXNX positions at the end of the first quarter.

If you’d ask most shareholders, hedge funds are assumed to be underperforming, old financial vehicles of yesteryear. While there are greater than 8000 funds with their doors open at the moment, We hone in on the bigwigs of this club, around 850 funds. Most estimates calculate that this group of people command bulk of the hedge fund industry’s total asset base, and by paying attention to their inimitable stock picks, Insider Monkey has discovered various investment strategies that have historically outstripped the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. 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. 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 homepage. Now we’re going to take a peek at the new hedge fund action encompassing Axonics Inc. (NASDAQ:AXNX).

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

At second quarter’s end, a total of 22 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 38% from the previous quarter. By comparison, 26 hedge funds held shares or bullish call options in AXNX a year ago. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

The largest stake in Axonics Inc. (NASDAQ:AXNX) was held by Millennium Management, which reported holding $67.3 million worth of stock at the end of June. It was followed by Polar Capital with a $35.6 million position. Other investors bullish on the company included Citadel Investment Group, Rhenman & Partners Asset Management, and Driehaus Capital. In terms of the portfolio weights assigned to each position Blackcrane Capital allocated the biggest weight to Axonics Inc. (NASDAQ:AXNX), around 4.32% of its 13F portfolio. Parian Global Management is also relatively very bullish on the stock, setting aside 2.48 percent of its 13F equity portfolio to AXNX.

As one would reasonably expect, key hedge funds have jumped into Axonics Inc. (NASDAQ:AXNX) headfirst. Sectoral Asset Management, managed by Jerome Pfund and Michael Sjostrom, created the largest position in Axonics Inc. (NASDAQ:AXNX). Sectoral Asset Management had $23.4 million invested in the company at the end of the quarter. Zachary Miller’s Parian Global Management also made a $5.8 million investment in the stock during the quarter. The following funds were also among the new AXNX investors: Ray Dalio’s Bridgewater Associates, Louis Bacon’s Moore Global Investments, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors.

Let’s check out hedge fund activity in other stocks similar to Axonics Inc. (NASDAQ:AXNX). These stocks are BancorpSouth Bank (NYSE:BXS), Nova Ltd. (NASDAQ:NVMI), SM Energy Company (NYSE:SM), Himax Technologies, Inc. (NASDAQ:HIMX), Intercorp Financial Services Inc. (NYSE:IFS), Nelnet, Inc. (NYSE:NNI), and InnovAge Holding Corp. (NASDAQ:INNV). This group of stocks’ market caps resemble AXNX’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.1 hedge funds with bullish positions and the average amount invested in these stocks was $194 million. That figure was $319 million in AXNX’s case. SM Energy Company (NYSE:SM) is the most popular stock in this table. On the other hand Intercorp Financial Services Inc. (NYSE:IFS) is the least popular one with only 4 bullish hedge fund positions. Axonics Inc. (NASDAQ:AXNX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for AXNX is 76.4. 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 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Hedge funds were also right about betting on AXNX as the stock returned 6.3% since the end of Q2 (through 10/22) 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.