In this article we will take a look at whether hedge funds think Electromed, Inc. (NYSE:ELMD) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Electromed, Inc. (NYSE:ELMD) investors should pay attention to an increase in activity from the world's largest hedge funds lately. Our calculations also showed that ELMD 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.
In today’s marketplace there are numerous signals stock traders employ to size up publicly traded companies. Some of the less known signals are hedge fund and insider trading signals. We have shown that, historically, those who follow the best picks of the elite fund managers can outperform their index-focused peers by a healthy margin (see the details here).
[caption id="attachment_26255" align="aligncenter" width="400"] Louis Navellier of Navellier & Associates[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we're going to take a look at the latest hedge fund action encompassing Electromed, Inc. (NYSE:ELMD).
Hedge fund activity in Electromed, Inc. (NYSE:ELMD)
At Q1's end, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 300% from the fourth quarter of 2019. The graph below displays the number of hedge funds with bullish position in ELMD over the last 18 quarters. So, let's find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the most valuable position in Electromed, Inc. (NYSE:ELMD). Renaissance Technologies has a $2.1 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Navellier & Associates, led by Louis Navellier, holding a $0.2 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other peers that hold long positions consist of Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital, Chuck Royce's Royce & Associates and . In terms of the portfolio weights assigned to each position Navellier & Associates allocated the biggest weight to Electromed, Inc. (NYSE:ELMD), around 0.06% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.002 percent of its 13F equity portfolio to ELMD.
As one would reasonably expect, some big names have been driving this bullishness. Navellier & Associates, managed by Louis Navellier, assembled the largest position in Electromed, Inc. (NYSE:ELMD). Navellier & Associates had $0.2 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell's Arrowstreet Capital also made a $0.1 million investment in the stock during the quarter. The only other fund with a new position in the stock is Chuck Royce's Royce & Associates.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Electromed, Inc. (NYSE:ELMD) but similarly valued. These stocks are Express, Inc. (NYSE:EXPR), PhaseBio Pharmaceuticals, Inc. (NASDAQ:PHAS), Malvern Bancorp, Inc. (NASDAQ:MLVF), and California BanCorp (NASDAQ:CALB). This group of stocks' market caps are similar to ELMD's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position EXPR,13,37262,1 PHAS,7,7932,-1 MLVF,5,19112,1 CALB,4,9702,4 Average,7.25,18502,1.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.25 hedge funds with bullish positions and the average amount invested in these stocks was $19 million. That figure was $2 million in ELMD's case. Express, Inc. (NYSE:EXPR) is the most popular stock in this table. On the other hand California BanCorp (NASDAQ:CALB) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Electromed, Inc. (NYSE:ELMD) is even less popular than CALB. Hedge funds clearly dropped the ball on ELMD as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on ELMD as the stock returned 28.3% so far in the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.