In this article you are going to find out whether hedge funds think Itamar Medical Ltd. (NASDAQ:ITMR) 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.
Itamar Medical Ltd. (NASDAQ:ITMR) investors should be aware of an increase in activity from the world's largest hedge funds in recent months. Our calculations also showed that ITMR 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If you'd ask most shareholders, hedge funds are perceived as underperforming, outdated investment vehicles of yesteryear. While there are more than 8000 funds with their doors open at the moment, We choose to focus on the bigwigs of this club, approximately 850 funds. It is estimated that this group of investors watch over the majority of the hedge fund industry's total capital, and by keeping an eye on their highest performing picks, Insider Monkey has come up with a few investment strategies that have historically beaten the market. Insider Monkey's flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points annually 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_140292" align="aligncenter" width="400"] Israel Englander of Millennium Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. 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. Keeping this in mind we're going to analyze the fresh hedge fund action regarding Itamar Medical Ltd. (NASDAQ:ITMR).
How have hedgies been trading Itamar Medical Ltd. (NASDAQ:ITMR)?
Heading into the second quarter of 2020, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a change of 167% from the previous quarter. On the other hand, there were a total of 2 hedge funds with a bullish position in ITMR 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.
More specifically, Redmile Group was the largest shareholder of Itamar Medical Ltd. (NASDAQ:ITMR), with a stake worth $7.4 million reported as of the end of September. Trailing Redmile Group was Deerfield Management, which amassed a stake valued at $5.9 million. Parkman Healthcare Partners, Pura Vida Investments, and Royce & Associates 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 Itamar Medical Ltd. (NASDAQ:ITMR), around 1.57% of its 13F portfolio. Parkman Healthcare Partners is also relatively very bullish on the stock, dishing out 1.45 percent of its 13F equity portfolio to ITMR.
Consequently, some big names have been driving this bullishness. Redmile Group, managed by Jeremy Green, assembled the most outsized position in Itamar Medical Ltd. (NASDAQ:ITMR). Redmile Group had $7.4 million invested in the company at the end of the quarter. Efrem Kamen's Pura Vida Investments also made a $1.8 million investment in the stock during the quarter. The other funds with brand new ITMR positions are Guy Levy's Soleus Capital, Israel Englander's Millennium Management, and Renaissance Technologies.
Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Itamar Medical Ltd. (NASDAQ:ITMR) but similarly valued. These stocks are Casper Sleep Inc. (NYSE:CSPR), MEI Pharma Inc (NASDAQ:MEIP), Northrim BanCorp, Inc. (NASDAQ:NRIM), and Accuray Incorporated (NASDAQ:ARAY). This group of stocks' market values are closest to ITMR's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CSPR,4,4295,4 MEIP,14,45986,-1 NRIM,9,20633,0 ARAY,15,31226,-1 Average,10.5,25535,0.5 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $26 million. That figure was $22 million in ITMR's case. Accuray Incorporated (NASDAQ:ARAY) is the most popular stock in this table. On the other hand Casper Sleep Inc. (NYSE:CSPR) is the least popular one with only 4 bullish hedge fund positions. Itamar Medical Ltd. (NASDAQ:ITMR) is not the least popular stock in this group but hedge fund interest is still below average. 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 12.2% in 2020 through June 17th and still beat the market by 14.8 percentage points. A small number of hedge funds were also right about betting on ITMR as the stock returned 82.7% during the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.