Is Eyenovia (EYEN) A Good Stock To Buy Now?

Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 817 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Eyenovia, Inc. (NASDAQ:EYEN).

Is Eyenovia (EYEN) a good stock to buy now? EYEN has experienced an increase in enthusiasm from smart money lately. Eyenovia, Inc. (NASDAQ:EYEN) was in 6 hedge funds’ portfolios at the end of September. The all time high for this statistics is 4. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. There were 2 hedge funds in our database with EYEN positions at the end of the second quarter. Our calculations also showed that EYEN 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.

In the financial world there are a large number of formulas stock market investors employ to evaluate their holdings. Some of the less known formulas are hedge fund and insider trading activity. We have shown that, historically, those who follow the best picks of the top hedge fund managers can outperform the broader indices by a healthy amount (see the details here).

David Siegel of Two Sigma Advisors

David Siegel of Two Sigma Advisors

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. Now let’s take a peek at the fresh hedge fund action encompassing Eyenovia, Inc. (NASDAQ:EYEN).

How are hedge funds trading Eyenovia, Inc. (NASDAQ:EYEN)?

At the end of September, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 200% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards EYEN over the last 21 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).

The largest stake in Eyenovia, Inc. (NASDAQ:EYEN) was held by Sabby Capital, which reported holding $1.9 million worth of stock at the end of September. It was followed by Fairpointe Capital with a $0.7 million position. Other investors bullish on the company included Renaissance Technologies, Millennium Management, and Two Sigma Advisors. In terms of the portfolio weights assigned to each position Sabby Capital allocated the biggest weight to Eyenovia, Inc. (NASDAQ:EYEN), around 0.28% of its 13F portfolio. Fairpointe Capital is also relatively very bullish on the stock, designating 0.1 percent of its 13F equity portfolio to EYEN.

As aggregate interest increased, key money managers have been driving this bullishness. Sabby Capital, managed by Hal Mintz, created the biggest position in Eyenovia, Inc. (NASDAQ:EYEN). Sabby Capital had $1.9 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $0.1 million investment in the stock during the quarter. The other funds with new positions in the stock are John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group.

Let’s check out hedge fund activity in other stocks similar to Eyenovia, Inc. (NASDAQ:EYEN). These stocks are NexPoint Real Estate Finance, Inc. (NYSE:NREF), China Customer Relations Centers, Inc. (NASDAQ:CCRC), electroCore, Inc. (NASDAQ:ECOR), Farmer Brothers Co. (NASDAQ:FARM), Acme United Corporation (NYSE:ACU), Strattec Security Corp. (NASDAQ:STRT), and Citizens Community Bancorp Inc. (NASDAQ:CZWI). All of these stocks’ market caps are closest to EYEN’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NREF 6 8047 1
CCRC 1 117 0
ECOR 2 311 -2
FARM 13 22129 -3
ACU 2 7700 0
STRT 3 12559 0
CZWI 5 10811 0
Average 4.6 8811 -0.6

View table here if you experience formatting issues.

As you can see these stocks had an average of 4.6 hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $3 million in EYEN’s case. Farmer Brothers Co. (NASDAQ:FARM) is the most popular stock in this table. On the other hand China Customer Relations Centers, Inc. (NASDAQ:CCRC) is the least popular one with only 1 bullish hedge fund positions. Eyenovia, Inc. (NASDAQ:EYEN) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EYEN is 59.8. 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 November 27th and still beat the market by 16.1 percentage points. Hedge funds were also right about betting on EYEN as the stock returned 16.3% since the end of Q3 (through 11/27) 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.