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Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is CONMED Corporation (NASDAQ:CNMD), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is CONMED Corporation (NASDAQ:CNMD) a buy, sell, or hold? Hedge funds were taking a pessimistic view. The number of bullish hedge fund positions shrunk by 2 in recent months. CONMED Corporation (NASDAQ:CNMD) was in 21 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic is 33. Our calculations also showed that CNMD isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Kris Jenner of Rock Springs Capital Management
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Do Hedge Funds Think CNMD Is A Good Stock To Buy Now?
At the end of June, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of -9% from the previous quarter. By comparison, 31 hedge funds held shares or bullish call options in CNMD a year ago. With hedgies' sentiment swirling, there exists a select group of key hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Ken Fisher's Fisher Asset Management has the largest position in CONMED Corporation (NASDAQ:CNMD), worth close to $44.2 million, accounting for less than 0.1%% of its total 13F portfolio. Coming in second is Deepcurrents Investment Group, led by Steve Zheng, holding a $35.4 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism contain Kevin Molloy's Iron Triangle Partners, Kris Jenner, Gordon Bussard, Graham McPhail's Rock Springs Capital Management and Ken Griffin's Citadel Investment Group. In terms of the portfolio weights assigned to each position Iron Triangle Partners allocated the biggest weight to CONMED Corporation (NASDAQ:CNMD), around 3.07% of its 13F portfolio. Deepcurrents Investment Group is also relatively very bullish on the stock, earmarking 1.06 percent of its 13F equity portfolio to CNMD.
Judging by the fact that CONMED Corporation (NASDAQ:CNMD) has witnessed declining sentiment from the aggregate hedge fund industry, we can see that there exists a select few fund managers that elected to cut their full holdings last quarter. Interestingly, Arthur B Cohen and Joseph Healey's Healthcor Management LP sold off the largest position of all the hedgies watched by Insider Monkey, comprising close to $36.2 million in stock. Dmitry Balyasny's fund, Balyasny Asset Management, also cut its stock, about $16.1 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 2 funds last quarter.
Let's also examine hedge fund activity in other stocks similar to CONMED Corporation (NASDAQ:CNMD). These stocks are American National Group Inc. (NASDAQ:ANAT), Avnet, Inc. (NYSE:AVT), Sabre Corporation (NASDAQ:SABR), Hecla Mining Company (NYSE:HL), BankUnited Inc (NYSE:BKU), Physicians Realty Trust (NYSE:DOC), and Iovance Biotherapeutics, Inc. (NASDAQ:IOVA). All of these stocks' market caps resemble CNMD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ANAT,20,113272,9 AVT,28,817188,1 SABR,37,972156,-3 HL,20,102393,4 BKU,13,140284,4 DOC,16,63892,-3 IOVA,30,1666448,-7 Average,23.4,553662,0.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 23.4 hedge funds with bullish positions and the average amount invested in these stocks was $554 million. That figure was $175 million in CNMD's case. Sabre Corporation (NASDAQ:SABR) is the most popular stock in this table. On the other hand BankUnited Inc (NYSE:BKU) is the least popular one with only 13 bullish hedge fund positions. CONMED Corporation (NASDAQ:CNMD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CNMD is 38.8. 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 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 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. A small number of hedge funds were also right about betting on CNMD as the stock returned 6.5% since the end of the second quarter (through 10/22) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.