After several tireless days we have finished crunching the numbers from nearly 750 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms' equity portfolios as of December 31. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Orthofix Medical Inc. (NASDAQ:OFIX).
Is Orthofix Medical Inc. (NASDAQ:OFIX) a buy here? Hedge funds are betting on the stock. The number of bullish hedge fund positions increased by 1 in recent months. Our calculations also showed that OFIX isn't among the 30 most popular stocks among hedge funds. OFIX was in 18 hedge funds' portfolios at the end of the fourth quarter of 2018. There were 17 hedge funds in our database with OFIX positions at the end of the previous quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We're going to take a look at the latest hedge fund action regarding Orthofix Medical Inc. (NASDAQ:OFIX).
What does the smart money think about Orthofix Medical Inc. (NASDAQ:OFIX)?
At the end of the fourth quarter, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from one quarter earlier. On the other hand, there were a total of 20 hedge funds with a bullish position in OFIX a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Renaissance Technologies held the most valuable stake in Orthofix Medical Inc. (NASDAQ:OFIX), which was worth $32.8 million at the end of the fourth quarter. On the second spot was GLG Partners which amassed $12 million worth of shares. Moreover, Citadel Investment Group, Marshall Wace LLP, and GAMCO Investors were also bullish on Orthofix Medical Inc. (NASDAQ:OFIX), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, key money managers were breaking ground themselves. AQR Capital Management, managed by Cliff Asness, created the most valuable position in Orthofix Medical Inc. (NASDAQ:OFIX). AQR Capital Management had $4.5 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also made a $2.1 million investment in the stock during the quarter. The other funds with brand new OFIX positions are Efrem Kamen's Pura Vida Investments, Paul Tudor Jones's Tudor Investment Corp, and Minhua Zhang's Weld Capital Management.
Let's now take a look at hedge fund activity in other stocks similar to Orthofix Medical Inc. (NASDAQ:OFIX). These stocks are Tricida, Inc. (NASDAQ:TCDA), Golub Capital BDC Inc (NASDAQ:GBDC), Sonos, Inc. (NASDAQ:SONO), and Cardiovascular Systems Inc (NASDAQ:CSII). This group of stocks' market values are closest to OFIX's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TCDA,13,406032,-2 GBDC,10,28292,0 SONO,12,23760,2 CSII,21,153645,-1 Average,14,152932,-0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $153 million. That figure was $78 million in OFIX's case. Cardiovascular Systems Inc (NASDAQ:CSII) is the most popular stock in this table. On the other hand Golub Capital BDC Inc (NASDAQ:GBDC) is the least popular one with only 10 bullish hedge fund positions. Orthofix Medical Inc. (NASDAQ:OFIX) 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 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately OFIX wasn't nearly as popular as these 15 stock and hedge funds that were betting on OFIX were disappointed as the stock returned 1.6% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.