A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Insulet Corporation (NASDAQ:PODD).
Is PODD a good stock to buy now? Insulet Corporation (NASDAQ:PODD) has seen a decrease in support from the world’s most elite money managers lately. Insulet Corporation (NASDAQ:PODD) was in 38 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 44. There were 44 hedge funds in our database with PODD positions at the end of the second quarter. Our calculations also showed that PODD 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 tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy 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 we’re going to go over the key hedge fund action surrounding Insulet Corporation (NASDAQ:PODD).
Do Hedge Funds Think PODD Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 38 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -14% from the previous quarter. On the other hand, there were a total of 38 hedge funds with a bullish position in PODD 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.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Coatue Management, managed by Philippe Laffont, holds the most valuable position in Insulet Corporation (NASDAQ:PODD). Coatue Management has a $345.7 million position in the stock, comprising 1.8% of its 13F portfolio. The second most bullish fund manager is Lone Pine Capital, which holds a $109.4 million position; the fund has 0.5% of its 13F portfolio invested in the stock. Other peers that hold long positions comprise Renaissance Technologies, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management and Ken Fisher’s Fisher Asset Management. In terms of the portfolio weights assigned to each position Think Investments allocated the biggest weight to Insulet Corporation (NASDAQ:PODD), around 8.83% of its 13F portfolio. Parian Global Management is also relatively very bullish on the stock, dishing out 4.67 percent of its 13F equity portfolio to PODD.
Judging by the fact that Insulet Corporation (NASDAQ:PODD) has witnessed bearish sentiment from the smart money, it’s easy to see that there were a few money managers who were dropping their entire stakes heading into Q4. At the top of the heap, Donald Sussman’s Paloma Partners said goodbye to the biggest investment of all the hedgies tracked by Insider Monkey, valued at an estimated $2.9 million in stock, and Paul Tudor Jones’s Tudor Investment Corp was right behind this move, as the fund dumped about $1 million worth. These bearish behaviors are interesting, as total hedge fund interest was cut by 6 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks similar to Insulet Corporation (NASDAQ:PODD). These stocks are Etsy Inc (NASDAQ:ETSY), Quest Diagnostics Incorporated (NYSE:DGX), Slack Technologies Inc (NYSE:WORK), EXACT Sciences Corporation (NASDAQ:EXAS), Bio-Rad Laboratories, Inc. (NYSE:BIO), Synchrony Financial (NYSE:SYF), and XPeng Inc. (NYSE:XPEV). This group of stocks’ market caps are similar to PODD’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 38.1 hedge funds with bullish positions and the average amount invested in these stocks was $990 million. That figure was $1153 million in PODD’s case. Etsy Inc (NASDAQ:ETSY) is the most popular stock in this table. On the other hand Slack Technologies Inc (NYSE:WORK) is the least popular one with only 20 bullish hedge fund positions. Insulet Corporation (NASDAQ:PODD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PODD is 53.9. 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 negative signal and 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 33.3% in 2020 through December 18th and surpassed the market again by 16.4 percentage points. Unfortunately PODD wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); PODD investors were disappointed as the stock returned 1.7% since the end of September (through 12/18) 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 most of these stocks already outperformed the market in 2020.
Disclosure: None. This article was originally published at Insider Monkey.