Is Second Sight Medical Products Inc (EYES) A Good Stock To Buy?

·6 min read

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. Insider Monkey finished processing 866 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. What do these smart investors think about Second Sight Medical Products Inc (NASDAQ:EYES)?

Is EYES a good stock to buy? Second Sight Medical Products Inc (NASDAQ:EYES) has experienced an increase in enthusiasm from smart money in recent months. Second Sight Medical Products Inc (NASDAQ:EYES) was in 3 hedge funds' portfolios at the end of March. The all time high for this statistic is 5. There were 1 hedge funds in our database with EYES positions at the end of the fourth quarter. Our calculations also showed that EYES isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

To the average investor there are tons of tools market participants have at their disposal to grade their stock investments. A duo of the most under-the-radar tools are hedge fund and insider trading moves. We have shown that, historically, those who follow the top picks of the best money managers can outpace the broader indices by a healthy amount (see the details here). Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Sander Gerber of Hudson Bay Capital
Sander Gerber of Hudson Bay Capital

Sander Gerber of Hudson Bay Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $26 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. With all of this in mind let's analyze the recent hedge fund action surrounding Second Sight Medical Products Inc (NASDAQ:EYES).

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

At the end of March, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 200% from the fourth quarter of 2020. By comparison, 0 hedge funds held shares or bullish call options in EYES a year ago. With hedge funds' sentiment swirling, there exists a few noteworthy hedge fund managers who were adding to their holdings significantly (or already accumulated large positions).

Among these funds, Hudson Bay Capital Management held the most valuable stake in Second Sight Medical Products Inc (NASDAQ:EYES), which was worth $7.9 million at the end of the fourth quarter. On the second spot was Sabby Capital which amassed $7.6 million worth of shares. Citadel Investment Group was 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 Sabby Capital allocated the biggest weight to Second Sight Medical Products Inc (NASDAQ:EYES), around 1.48% of its 13F portfolio. Hudson Bay Capital Management is also relatively very bullish on the stock, dishing out 0.1 percent of its 13F equity portfolio to EYES.

As industrywide interest jumped, key money managers were leading the bulls' herd. Hudson Bay Capital Management, managed by Sander Gerber, initiated the biggest position in Second Sight Medical Products Inc (NASDAQ:EYES). Hudson Bay Capital Management had $7.9 million invested in the company at the end of the quarter. Hal Mintz's Sabby Capital also initiated a $7.6 million position during the quarter. The only other fund with a new position in the stock is Ken Griffin's Citadel Investment Group.

Let's go over hedge fund activity in other stocks similar to Second Sight Medical Products Inc (NASDAQ:EYES). We will take a look at Zynerba Pharmaceuticals Inc (NASDAQ:ZYNE), Lazydays Holdings, Inc. (NASDAQ:LAZY), Exicure, Inc. (NASDAQ:XCUR), L.B. Foster Company (NASDAQ:FSTR), Universal Technical Institute, Inc. (NYSE:UTI), CIM Commercial Trust Corporation (NASDAQ:CMCT), and Travelzoo (NASDAQ:TZOO). This group of stocks' market caps match EYES's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ZYNE,6,3479,0 LAZY,10,33874,0 XCUR,9,19857,1 FSTR,15,36919,3 UTI,9,41957,-3 CMCT,1,11739,-2 TZOO,9,23193,2 Average,8.4,24431,0.1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.4 hedge funds with bullish positions and the average amount invested in these stocks was $24 million. That figure was $16 million in EYES's case. L.B. Foster Company (NASDAQ:FSTR) is the most popular stock in this table. On the other hand CIM Commercial Trust Corporation (NASDAQ:CMCT) is the least popular one with only 1 bullish hedge fund positions. Second Sight Medical Products Inc (NASDAQ:EYES) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for EYES is 32.1. 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 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 17.2% in 2021 through June 11th and surpassed the market again by 3.3 percentage points. Unfortunately EYES wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); EYES investors were disappointed as the stock returned -19.4% since the end of March (through 6/11) 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 most of these stocks already outperformed the market in 2021.

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Disclosure: None. This article was originally published at Insider Monkey.

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