In this article we will check out the progression of hedge fund sentiment towards iRadimed Corporation (NASDAQ:IRMD) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
iRadimed Corporation (NASDAQ:IRMD) has seen an increase in support from the world's most elite money managers lately. Our calculations also showed that IRMD isn't among the 30 most popular stocks among hedge funds (click for Q1 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.
If you'd ask most market participants, hedge funds are viewed as unimportant, outdated investment tools of the past. While there are greater than 8000 funds trading at the moment, We choose to focus on the elite of this group, about 850 funds. Most estimates calculate that this group of people oversee the lion's share of the smart money's total asset base, and by paying attention to their best stock picks, Insider Monkey has determined numerous investment strategies that have historically outpaced Mr. Market. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
[caption id="attachment_27480" align="aligncenter" width="398"] Israel Englander of Millennium Management[/caption]
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, blockchain technology's influence will go beyond online payments. So, we are checking out this futurist's moonshot opportunities in tech stocks. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now we're going to take a look at the latest hedge fund action encompassing iRadimed Corporation (NASDAQ:IRMD).
What does smart money think about iRadimed Corporation (NASDAQ:IRMD)?
Heading into the second quarter of 2020, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from the fourth quarter of 2019. By comparison, 8 hedge funds held shares or bullish call options in IRMD a year ago. So, let's check 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 iRadimed Corporation (NASDAQ:IRMD), with a stake worth $13.4 million reported as of the end of September. Trailing Renaissance Technologies was Nine Ten Partners, which amassed a stake valued at $5.9 million. Soleus Capital, Parkman Healthcare Partners, and Millennium 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 Soleus Capital allocated the biggest weight to iRadimed Corporation (NASDAQ:IRMD), around 5.83% of its 13F portfolio. Nine Ten Partners is also relatively very bullish on the stock, earmarking 2.36 percent of its 13F equity portfolio to IRMD.
Now, specific money managers were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, initiated the biggest position in iRadimed Corporation (NASDAQ:IRMD). Citadel Investment Group had $0.4 million invested in the company at the end of the quarter. Peter Muller's PDT Partners also made a $0.2 million investment in the stock during the quarter.
Let's check out hedge fund activity in other stocks - not necessarily in the same industry as iRadimed Corporation (NASDAQ:IRMD) but similarly valued. We will take a look at Catasys, Inc. (NASDAQ:CATS), Invacare Corporation (NYSE:IVC), Diamond Offshore Drilling Inc (NYSE:DO), and Seres Therapeutics Inc (NASDAQ:MCRB). This group of stocks' market valuations resemble IRMD's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CATS,8,6175,2 IVC,19,62476,4 DO,10,30889,-6 MCRB,4,6070,-1 Average,10.25,26403,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $32 million in IRMD's case. Invacare Corporation (NYSE:IVC) is the most popular stock in this table. On the other hand Seres Therapeutics Inc (NASDAQ:MCRB) is the least popular one with only 4 bullish hedge fund positions. iRadimed Corporation (NASDAQ:IRMD) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.3% in 2020 through June 25th but beat the market by 16.8 percentage points. Unfortunately IRMD wasn't nearly as popular as these 10 stocks and hedge funds that were betting on IRMD were disappointed as the stock returned 6.8% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.