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Hedge Funds Are Buying iMedia Brands, Inc. (IMBI)

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A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended March 31st, so let’s proceed with the discussion of the hedge fund sentiment on iMedia Brands, Inc. (NASDAQ:IMBI).

iMedia Brands, Inc. (NASDAQ:IMBI) was in 5 hedge funds' portfolios at the end of March. The all time high for this statistic is 16. IMBI investors should pay attention to an increase in activity from the world's largest hedge funds of late. There were 2 hedge funds in our database with IMBI positions at the end of the fourth quarter. Our calculations also showed that IMBI isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 more than 115 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

Billionaire David Siegel's Top 10 Stock Picks
Billionaire David Siegel's Top 10 Stock Picks

David Siegel of Two Sigma Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $27 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. Now let's take a gander at the new hedge fund action regarding iMedia Brands, Inc. (NASDAQ:IMBI).

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

At Q1's end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 150% from the previous quarter. By comparison, 2 hedge funds held shares or bullish call options in IMBI a year ago. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Ophir Asset Management held the most valuable stake in iMedia Brands, Inc. (NASDAQ:IMBI), which was worth $6.3 million at the end of the fourth quarter. On the second spot was Renaissance Technologies which amassed $4 million worth of shares. Two Sigma Advisors, Millennium Management, and Citadel Investment Group 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 Ophir Asset Management allocated the biggest weight to iMedia Brands, Inc. (NASDAQ:IMBI), around 1.27% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, earmarking 0.005 percent of its 13F equity portfolio to IMBI.

Now, specific money managers have been driving this bullishness. Ophir Asset Management, managed by Steven Ng and Andrew Mitchell, initiated the largest position in iMedia Brands, Inc. (NASDAQ:IMBI). Ophir Asset Management had $6.3 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $0.2 million investment in the stock during the quarter. The only other fund with a new position in the stock is Ken Griffin's Citadel Investment Group.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as iMedia Brands, Inc. (NASDAQ:IMBI) but similarly valued. These stocks are Old Point Financial Corporation (NASDAQ:OPOF), First United Corp (NASDAQ:FUNC), Otonomy Inc (NASDAQ:OTIC), Scopus BioPharma Inc. (NASDAQ:SCPS), First Eagle Alternative Capital BDC, Inc. (NASDAQ:FCRD), Westwood Holdings Group, Inc. (NYSE:WHG), and Flotek Industries Inc (NYSE:FTK). All of these stocks' market caps resemble IMBI's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position OPOF,2,1411,0 FUNC,2,4659,-3 OTIC,16,44505,-4 SCPS,2,943,1 FCRD,2,11468,-4 WHG,6,19614,0 FTK,10,16153,-3 Average,5.7,14108,-1.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 5.7 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $12 million in IMBI's case. Otonomy Inc (NASDAQ:OTIC) is the most popular stock in this table. On the other hand Old Point Financial Corporation (NASDAQ:OPOF) is the least popular one with only 2 bullish hedge fund positions. iMedia Brands, Inc. (NASDAQ:IMBI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IMBI is 28.1. 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 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately IMBI wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); IMBI investors were disappointed as the stock returned -4.3% since the end of March (through 6/18) 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.