Is Zomedica Pharmaceuticals Corp. (NYSE:ZOM) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Zomedica Pharmaceuticals Corp. (NYSE:ZOM) a cheap stock to buy now? Money managers are in an optimistic mood. The number of long hedge fund positions rose by 3 in recent months. Our calculations also showed that ZOM isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are a multitude of methods shareholders put to use to size up their stock investments. A pair of the most innovative methods are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the top investment managers can trounce their index-focused peers by a healthy margin (see the details here).
[caption id="attachment_258236" align="alignnone" width="600"] Ken Griffin of Citadel Investment Group[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. 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 even check out this option genius' weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager's investor letter and the stock already gained 20 percent. Keeping this in mind let's take a look at the recent hedge fund action encompassing Zomedica Pharmaceuticals Corp. (NYSE:ZOM).
How have hedgies been trading Zomedica Pharmaceuticals Corp. (NYSE:ZOM)?
At Q3's end, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 150% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ZOM over the last 17 quarters. With the smart money's sentiment swirling, there exists a few notable hedge fund managers who were upping their holdings meaningfully (or already accumulated large positions).
More specifically, LMR Partners was the largest shareholder of Zomedica Pharmaceuticals Corp. (NYSE:ZOM), with a stake worth $0 million reported as of the end of September. Trailing LMR Partners was Citadel Investment Group, which amassed a stake valued at $0 million. Renaissance Technologies, Millennium Management, and Paloma Partners 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 LMR Partners allocated the biggest weight to Zomedica Pharmaceuticals Corp. (NYSE:ZOM), around 0.0009% of its 13F portfolio. Paloma Partners is also relatively very bullish on the stock, earmarking 0.0001 percent of its 13F equity portfolio to ZOM.
Consequently, key hedge funds have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, established the largest position in Zomedica Pharmaceuticals Corp. (NYSE:ZOM). Citadel Investment Group had $0 million invested in the company at the end of the quarter. Renaissance Technologies also made a $0 million investment in the stock during the quarter.
Let's now take a look at hedge fund activity in other stocks similar to Zomedica Pharmaceuticals Corp. (NYSE:ZOM). We will take a look at Alimera Sciences Inc (NASDAQ:ALIM), Quorum Health Corporation (NYSE:QHC), Nautilus, Inc. (NYSE:NLS), and RCM Technologies, Inc. (NASDAQ:RCMT). All of these stocks' market caps are similar to ZOM's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ALIM,9,13895,0 QHC,11,7125,0 NLS,13,6908,-1 RCMT,3,2784,1 Average,9,7678,0 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $0 million in ZOM's case. Nautilus, Inc. (NYSE:NLS) is the most popular stock in this table. On the other hand RCM Technologies, Inc. (NASDAQ:RCMT) is the least popular one with only 3 bullish hedge fund positions. Zomedica Pharmaceuticals Corp. (NYSE:ZOM) 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 ZOM wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); ZOM investors were disappointed as the stock returned -7.8% 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.