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Hedge Funds Have Never Been This Bullish On iRhythm Technologies, Inc. (IRTC)

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In this article you are going to find out whether hedge funds think iRhythm Technologies, Inc. (NASDAQ:IRTC) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

iRhythm Technologies, Inc. (NASDAQ:IRTC) was in 27 hedge funds' portfolios at the end of September. The all time high for this statistic was previously 26. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. IRTC investors should pay attention to an increase in activity from the world's largest hedge funds of late. There were 22 hedge funds in our database with IRTC holdings at the end of June. Our calculations also showed that IRTC isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Keeping this in mind let's take a look at the latest hedge fund action surrounding iRhythm Technologies, Inc. (NASDAQ:IRTC).

Kamran Moghtaderi of Eversept Partners

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

At Q3's end, a total of 27 of the hedge funds tracked by Insider Monkey were long this stock, a change of 23% from the previous quarter. On the other hand, there were a total of 26 hedge funds with a bullish position in IRTC a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Citadel Investment Group was the largest shareholder of iRhythm Technologies, Inc. (NASDAQ:IRTC), with a stake worth $36.1 million reported as of the end of September. Trailing Citadel Investment Group was Camber Capital Management, which amassed a stake valued at $27.8 million. Rock Springs Capital Management, Holocene Advisors, 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 Parian Global Management allocated the biggest weight to iRhythm Technologies, Inc. (NASDAQ:IRTC), around 2.31% of its 13F portfolio. Prosight Capital is also relatively very bullish on the stock, setting aside 1.2 percent of its 13F equity portfolio to IRTC.

As industrywide interest jumped, key hedge funds were breaking ground themselves. Camber Capital Management, managed by Stephen DuBois, established the most valuable position in iRhythm Technologies, Inc. (NASDAQ:IRTC). Camber Capital Management had $27.8 million invested in the company at the end of the quarter. Kamran Moghtaderi's Eversept Partners also initiated a $6.7 million position during the quarter. The other funds with brand new IRTC positions are Charles Clough's Clough Capital Partners, James E. Flynn's Deerfield Management, and Zachary Miller's Parian Global Management.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as iRhythm Technologies, Inc. (NASDAQ:IRTC) but similarly valued. We will take a look at Kite Realty Group Trust (NYSE:KRG), Compañía de Minas Buenaventura S.A.A. (NYSE:BVN), Hyzon Motors Inc. (NASDAQ:HYZN), Houghton Mifflin Harcourt Co (NASDAQ:HMHC), WideOpenWest, Inc. (NYSE:WOW), Porch Group, Inc. (NASDAQ:PRCH), and Peabody Energy Corporation (NYSE:BTU). This group of stocks' market values match IRTC's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position KRG,14,55546,3 BVN,6,33178,-2 HYZN,22,67196,22 HMHC,27,260287,6 WOW,16,267197,-3 PRCH,16,406859,-2 BTU,29,639384,11 Average,18.6,247092,5 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.6 hedge funds with bullish positions and the average amount invested in these stocks was $247 million. That figure was $203 million in IRTC's case. Peabody Energy Corporation (NYSE:BTU) is the most popular stock in this table. On the other hand Compañía de Minas Buenaventura S.A.A. (NYSE:BVN) is the least popular one with only 6 bullish hedge fund positions. iRhythm Technologies, Inc. (NASDAQ:IRTC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IRTC is 85.7. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Hedge funds were also right about betting on IRTC as the stock returned 62.2% since the end of Q3 (through 12/9) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.