Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the third quarter. You can find articles about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Intuitive Surgical, Inc. (NASDAQ:ISRG) based on that data and determine whether they were really smart about the stock.
Is Intuitive Surgical, Inc. (NASDAQ:ISRG) the right investment to pursue these days? The best stock pickers were in an optimistic mood. The number of long hedge fund positions improved by 1 recently. Intuitive Surgical, Inc. (NASDAQ:ISRG) was in 61 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 60. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ISRG isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Peter Rathjens of Arrowstreet Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. Keeping this in mind we’re going to analyze the recent hedge fund action regarding Intuitive Surgical, Inc. (NASDAQ:ISRG).
Do Hedge Funds Think ISRG Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2021, a total of 61 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 2% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ISRG over the last 25 quarters. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
Among these funds, Fisher Asset Management held the most valuable stake in Intuitive Surgical, Inc. (NASDAQ:ISRG), which was worth $1360 million at the end of the third quarter. On the second spot was Citadel Investment Group which amassed $373.8 million worth of shares. Two Sigma Advisors, Arrowstreet Capital, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Unio Capital allocated the biggest weight to Intuitive Surgical, Inc. (NASDAQ:ISRG), around 4.26% of its 13F portfolio. Aubrey Capital Management is also relatively very bullish on the stock, dishing out 2.75 percent of its 13F equity portfolio to ISRG.
As aggregate interest increased, specific money managers have jumped into Intuitive Surgical, Inc. (NASDAQ:ISRG) headfirst. Atika Capital, managed by Brad Farber, assembled the biggest position in Intuitive Surgical, Inc. (NASDAQ:ISRG). Atika Capital had $7.9 million invested in the company at the end of the quarter. Chen Tianqiao’s Shanda Asset Management also made a $7 million investment in the stock during the quarter. The other funds with new positions in the stock are Paul Tudor Jones’s Tudor Investment Corp, Paul Tudor Jones’s Tudor Investment Corp, and Karim Abbadi and Edward McBride’s Centiva Capital.
Let’s check out hedge fund activity in other stocks similar to Intuitive Surgical, Inc. (NASDAQ:ISRG). We will take a look at Snap Inc. (NYSE:SNAP), Applied Materials, Inc. (NASDAQ:AMAT), Pinduoduo Inc. (NASDAQ:PDD), General Electric Company (NYSE:GE), Diageo plc (NYSE:DEO), JD.Com Inc (NASDAQ:JD), and CVS Health Corporation (NYSE:CVS). This group of stocks’ market valuations are closest to ISRG’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SNAP | 78 | 6739225 | 14 |
| AMAT | 68 | 4320480 | -5 |
| PDD | 49 | 3538156 | 0 |
| GE | 53 | 6244560 | -14 |
| DEO | 18 | 703948 | -2 |
| JD | 66 | 9057155 | -10 |
| CVS | 61 | 1060624 | -6 |
| Average | 56.1 | 4523450 | -3.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 56.1 hedge funds with bullish positions and the average amount invested in these stocks was $4523 million. That figure was $3536 million in ISRG’s case. Snap Inc. (NYSE:SNAP) is the most popular stock in this table. On the other hand Diageo plc (NYSE:DEO) is the least popular one with only 18 bullish hedge fund positions. Intuitive Surgical, Inc. (NASDAQ:ISRG) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ISRG is 71.8. 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. 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 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 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, ISRG wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ISRG were disappointed as the stock returned -14.2% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
