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Is Integer Holdings Corporation (NYSE:ITGR) a good bet right now? We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds' picks don't beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Is Integer Holdings Corporation (NYSE:ITGR) going to take off soon? The smart money is getting less bullish. The number of bullish hedge fund bets shrunk by 2 recently. Our calculations also showed that ITGR isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). ITGR was in 16 hedge funds' portfolios at the end of the third quarter of 2019. There were 18 hedge funds in our database with ITGR positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world's largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, "I'm investing more today than I did back in early 2009." So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds' buy/sell signals. We're going to analyze the key hedge fund action encompassing Integer Holdings Corporation (NYSE:ITGR).
Hedge fund activity in Integer Holdings Corporation (NYSE:ITGR)
Heading into the fourth quarter of 2019, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -11% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ITGR over the last 17 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
More specifically, Fisher Asset Management was the largest shareholder of Integer Holdings Corporation (NYSE:ITGR), with a stake worth $69.3 million reported as of the end of September. Trailing Fisher Asset Management was GLG Partners, which amassed a stake valued at $28.9 million. Marshall Wace, AQR Capital Management, and Tamarack Capital 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 Tamarack Capital Management allocated the biggest weight to Integer Holdings Corporation (NYSE:ITGR), around 2.26% of its 13F portfolio. Sio Capital is also relatively very bullish on the stock, dishing out 1.23 percent of its 13F equity portfolio to ITGR.
Judging by the fact that Integer Holdings Corporation (NYSE:ITGR) has witnessed falling interest from the entirety of the hedge funds we track, it's safe to say that there was a specific group of fund managers that slashed their entire stakes last quarter. Intriguingly, Steve Cohen's Point72 Asset Management sold off the largest investment of all the hedgies followed by Insider Monkey, totaling an estimated $1.7 million in stock, and Matthew Hulsizer's PEAK6 Capital Management was right behind this move, as the fund sold off about $1.4 million worth. These transactions are interesting, as total hedge fund interest fell by 2 funds last quarter.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Integer Holdings Corporation (NYSE:ITGR) but similarly valued. We will take a look at Ultragenyx Pharmaceutical Inc (NASDAQ:RARE), Yelp Inc (NYSE:YELP), Carpenter Technology Corporation (NYSE:CRS), and Vishay Intertechnology (NYSE:VSH). This group of stocks' market values are similar to ITGR's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RARE,18,186654,2 YELP,26,417929,-1 CRS,13,72105,1 VSH,19,323885,0 Average,19,250143,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $250 million. That figure was $174 million in ITGR's case. Yelp Inc (NYSE:YELP) is the most popular stock in this table. On the other hand Carpenter Technology Corporation (NYSE:CRS) is the least popular one with only 13 bullish hedge fund positions. Integer Holdings Corporation (NYSE:ITGR) is not the least popular stock in this group but hedge fund interest is still below average. 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 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately ITGR wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ITGR investors were disappointed as the stock returned 0.4% during the first two months of the fourth quarter 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 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.