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In this article we will analyze whether TransMedics Group, Inc. (NASDAQ:TMDX) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There's no better way to get these firms' immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.
TransMedics Group, Inc. (NASDAQ:TMDX) investors should pay attention to a decrease in support from the world's most elite money managers recently. TransMedics Group, Inc. (NASDAQ:TMDX) was in 3 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 7. There were 4 hedge funds in our database with TMDX holdings at the end of December. Our calculations also showed that TMDX isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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Stuart Zimmer of Zimmer Partners
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Do Hedge Funds Think TMDX Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of -25% from the previous quarter. The graph below displays the number of hedge funds with bullish position in TMDX over the last 23 quarters. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Zimmer Partners, managed by Stuart J. Zimmer, holds the most valuable position in TransMedics Group, Inc. (NASDAQ:TMDX). Zimmer Partners has a $12.4 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by Millennium Management, led by Israel Englander, holding a $1.2 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism consist of Ken Griffin's Citadel Investment Group, Ken Griffin's Citadel Investment Group and . In terms of the portfolio weights assigned to each position Zimmer Partners allocated the biggest weight to TransMedics Group, Inc. (NASDAQ:TMDX), around 0.17% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, earmarking 0.0009 percent of its 13F equity portfolio to TMDX.
Since TransMedics Group, Inc. (NASDAQ:TMDX) has witnessed bearish sentiment from the smart money, it's easy to see that there was a specific group of fund managers who were dropping their full holdings last quarter. Intriguingly, David Abrams's Abrams Capital Management sold off the largest investment of all the hedgies monitored by Insider Monkey, valued at an estimated $69.6 million in stock, and Christopher Hillary's Roubaix Capital was right behind this move, as the fund cut about $4 million worth. These transactions are intriguing to say the least, as aggregate hedge fund interest dropped by 1 funds last quarter.
Let's go over hedge fund activity in other stocks similar to TransMedics Group, Inc. (NASDAQ:TMDX). We will take a look at Protagonist Therapeutics, Inc. (NASDAQ:PTGX), Agilysys, Inc. (NASDAQ:AGYS), Meridian Bioscience, Inc. (NASDAQ:VIVO), GreenSky, Inc. (NASDAQ:GSKY), MTS Systems Corporation (NASDAQ:MTSC), Repare Therapeutics Inc. (NASDAQ:RPTX), and 111, Inc. (NASDAQ:YI). All of these stocks' market caps match TMDX's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position PTGX,20,399766,-3 AGYS,13,335316,-4 VIVO,16,123358,-2 GSKY,11,36914,-3 MTSC,17,106391,1 RPTX,18,427184,0 YI,4,5158,-1 Average,14.1,204870,-1.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.1 hedge funds with bullish positions and the average amount invested in these stocks was $205 million. That figure was $14 million in TMDX's case. Protagonist Therapeutics, Inc. (NASDAQ:PTGX) is the most popular stock in this table. On the other hand 111, Inc. (NASDAQ:YI) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks TransMedics Group, Inc. (NASDAQ:TMDX) is even less popular than YI. Our overall hedge fund sentiment score for TMDX is 16.9. 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. Hedge funds dodged a bullet by taking a bearish stance towards TMDX. Our calculations showed that the top 10 most popular hedge fund stocks returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th but managed to beat the market again by 3.3 percentage points. Unfortunately TMDX wasn't nearly as popular as these 5 stocks (hedge fund sentiment was very bearish); TMDX investors were disappointed as the stock returned -31.8% since the end of the first quarter (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.