Is eMagin Corporation (EMAN) A Good Stock To Buy?

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards eMagin Corporation (NYSE:EMAN).

eMagin Corporation (NYSE:EMAN) has experienced an increase in hedge fund interest recently. eMagin Corporation (NYSE:EMAN) was in 4 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 3. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that EMAN 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 many formulas stock traders employ to value their stock investments. A couple of the less utilized formulas are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the elite investment managers can beat their index-focused peers by a very impressive amount (see the details here).

Peter Rathjens Arrowstreet Capital 394

Peter Rathjens of Arrowstreet Capital

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 10 most profitable companies in the world 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. Now let’s view the fresh hedge fund action encompassing eMagin Corporation (NYSE:EMAN).

How have hedgies been trading eMagin Corporation (NYSE:EMAN)?

At third quarter’s end, a total of 4 of the hedge funds tracked by Insider Monkey were long this stock, a change of 300% from one quarter earlier. By comparison, 2 hedge funds held shares or bullish call options in EMAN a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is EMAN A Good Stock To Buy?

Of the funds tracked by Insider Monkey, Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, holds the number one position in eMagin Corporation (NYSE:EMAN). Arrowstreet Capital has a $0.3 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Israel Englander of Millennium Management, with a $0.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other peers that hold long positions consist of Renaissance Technologies, Ken Griffin’s Citadel Investment Group and . In terms of the portfolio weights assigned to each position Arrowstreet Capital allocated the biggest weight to eMagin Corporation (NYSE:EMAN), around 0.0004% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, earmarking 0.0002 percent of its 13F equity portfolio to EMAN.

As one would reasonably expect, key hedge funds have jumped into eMagin Corporation (NYSE:EMAN) headfirst. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the largest position in eMagin Corporation (NYSE:EMAN). Arrowstreet Capital had $0.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.2 million investment in the stock during the quarter. The only other fund with a brand new EMAN position is Ken Griffin’s Citadel Investment Group.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as eMagin Corporation (NYSE:EMAN) but similarly valued. We will take a look at Research Frontiers, Inc. (NASDAQ:REFR), AIM ImmunoTech Inc. (NYSE:AIM), Neonode, Inc (NASDAQ:NEON), Gran Tierra Energy Inc. (NYSE:GTE), USD Partners LP (NYSE:USDP), Adams Resources & Energy Inc (NYSE:AE), and Geospace Technologies Corp (NASDAQ:GEOS). This group of stocks’ market valuations are similar to EMAN’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
REFR 2 139 -2
AIM 2 74 1
NEON 2 689 1
GTE 7 22103 -2
USDP 3 574 1
AE 3 7870 0
GEOS 4 3395 -4
Average 3.3 4978 -0.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 3.3 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. That figure was $0 million in EMAN’s case. Gran Tierra Energy Inc. (NYSE:GTE) is the most popular stock in this table. On the other hand Research Frontiers, Inc. (NASDAQ:REFR) is the least popular one with only 2 bullish hedge fund positions. eMagin Corporation (NYSE:EMAN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EMAN is 58. 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 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 November 27th and beat the market again by 16.1 percentage points. Unfortunately EMAN wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on EMAN were disappointed as the stock returned -9.4% since the end of September (through 11/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 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.