Is ATRI A Good Stock To Buy Now?
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. We have processed the filings of the more than 817 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Atrion Corporation (NASDAQ:ATRI) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Is ATRI a good stock to buy now? Atrion Corporation (NASDAQ:ATRI) has seen a decrease in support from the world's most elite money managers of late. Atrion Corporation (NASDAQ:ATRI) was in 10 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 17. Our calculations also showed that ATRI 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.
Paul Marshall of Marshall Wace
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 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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 take a peek at the fresh hedge fund action surrounding Atrion Corporation (NASDAQ:ATRI).
Do Hedge Funds Think ATRI Is A Good Stock To Buy Now?
At the end of September, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -17% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ATRI over the last 21 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Renaissance Technologies was the largest shareholder of Atrion Corporation (NASDAQ:ATRI), with a stake worth $30.2 million reported as of the end of September. Trailing Renaissance Technologies was Royce & Associates, which amassed a stake valued at $15.7 million. Millennium Management, Citadel Investment Group, and Marshall Wace LLP 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 Royce & Associates allocated the biggest weight to Atrion Corporation (NASDAQ:ATRI), around 0.17% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.03 percent of its 13F equity portfolio to ATRI.
Since Atrion Corporation (NASDAQ:ATRI) has experienced a decline in interest from the smart money, it's easy to see that there were a few hedge funds that elected to cut their full holdings by the end of the third quarter. Interestingly, Michael Gelband's ExodusPoint Capital sold off the largest stake of the "upper crust" of funds tracked by Insider Monkey, valued at close to $0.5 million in stock, and Roger Ibbotson's Zebra Capital Management was right behind this move, as the fund dumped about $0.3 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 2 funds by the end of the third quarter.
Let's go over hedge fund activity in other stocks similar to Atrion Corporation (NASDAQ:ATRI). These stocks are Mack Cali Realty Corp (NYSE:CLI), Victory Capital Holdings, Inc. (NASDAQ:VCTR), Revolve Group, Inc. (NYSE:RVLV), First Bancorp (NYSE:FBP), CSW Industrials, Inc. (NASDAQ:CSWI), Urban Edge Properties (NYSE:UE), and Banner Corporation (NASDAQ:BANR). This group of stocks' market values match ATRI's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CLI,11,39973,-2 VCTR,8,60210,-1 RVLV,21,78858,10 FBP,21,110879,-5 CSWI,16,29403,-3 UE,20,59441,-5 BANR,14,41696,0 Average,15.9,60066,-0.9 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.9 hedge funds with bullish positions and the average amount invested in these stocks was $60 million. That figure was $58 million in ATRI's case. Revolve Group, Inc. (NYSE:RVLV) is the most popular stock in this table. On the other hand Victory Capital Holdings, Inc. (NASDAQ:VCTR) is the least popular one with only 8 bullish hedge fund positions. Atrion Corporation (NASDAQ:ATRI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ATRI is 28.3. 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 32.9% in 2020 through December 8th and surpassed the market again by 16.2 percentage points. Unfortunately ATRI wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ATRI investors were disappointed as the stock returned 0.7% since the end of September (through 12/8) 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.
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Disclosure: None. This article was originally published at Insider Monkey.
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