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Is ICUI Stock A Buy?

Abigail Fisher
·6 min read

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards ICU Medical, Inc. (NASDAQ:ICUI).

Is ICUI stock a buy today? ICU Medical, Inc. (NASDAQ:ICUI) investors should be aware of a decrease in hedge fund sentiment lately. ICU Medical, Inc. (NASDAQ:ICUI) was in 31 hedge funds' portfolios at the end of September. The all time high for this statistic is 35. There were 32 hedge funds in our database with ICUI holdings at the end of June. Our calculations also showed that ICUI isn't among the 30 most popular stocks among hedge funds (click for Q3 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 the eyes of most shareholders, hedge funds are assumed to be underperforming, old financial vehicles of the past. While there are over 8000 funds in operation at present, Our experts hone in on the elite of this group, about 850 funds. Most estimates calculate that this group of people oversee most of all hedge funds' total capital, and by keeping an eye on their highest performing investments, Insider Monkey has unsheathed numerous investment strategies that have historically exceeded the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .

Minhua Zhang of Weld Capital Management

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind let's take a peek at the new hedge fund action encompassing ICU Medical, Inc. (NASDAQ:ICUI).

Do Hedge Funds Think ICUI Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ICUI over the last 21 quarters. With hedge funds' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).

The largest stake in ICU Medical, Inc. (NASDAQ:ICUI) was held by Nitorum Capital, which reported holding $75.9 million worth of stock at the end of September. It was followed by Partner Fund Management with a $55.4 million position. Other investors bullish on the company included Pura Vida Investments, Redmile Group, and Woodline Partners. In terms of the portfolio weights assigned to each position Tamarack Capital Management allocated the biggest weight to ICU Medical, Inc. (NASDAQ:ICUI), around 3.44% of its 13F portfolio. Nitorum Capital is also relatively very bullish on the stock, setting aside 3.36 percent of its 13F equity portfolio to ICUI.

Due to the fact that ICU Medical, Inc. (NASDAQ:ICUI) has faced bearish sentiment from the entirety of the hedge funds we track, we can see that there is a sect of hedgies that slashed their full holdings last quarter. At the top of the heap, Ricky Sandler's Eminence Capital dropped the biggest stake of the 750 funds monitored by Insider Monkey, worth close to $15.3 million in stock, and Vishal Saluja and Pham Quang's Endurant Capital Management was right behind this move, as the fund sold off about $6.6 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 1 funds last quarter.

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as ICU Medical, Inc. (NASDAQ:ICUI) but similarly valued. These stocks are Tenable Holdings, Inc. (NASDAQ:TENB), Regal Beloit Corporation (NYSE:RBC), Builders FirstSource, Inc. (NASDAQ:BLDR), The Aaron's Company, Inc. (NYSE:AAN), WillScot Mobile Mini Holdings Corp. (NASDAQ:WSC), Denali Therapeutics Inc. (NASDAQ:DNLI), and Grand Canyon Education Inc (NASDAQ:LOPE). This group of stocks' market valuations are similar to ICUI's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TENB,30,490303,8 RBC,25,241763,3 BLDR,38,616896,6 AAN,39,387786,12 WSC,36,574305,5 DNLI,24,121637,3 LOPE,32,193579,-3 Average,32,375181,4.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 32 hedge funds with bullish positions and the average amount invested in these stocks was $375 million. That figure was $296 million in ICUI's case. The Aaron's Company, Inc. (NYSE:AAN) is the most popular stock in this table. On the other hand Denali Therapeutics Inc. (NASDAQ:DNLI) is the least popular one with only 24 bullish hedge fund positions. ICU Medical, Inc. (NASDAQ:ICUI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ICUI is 53.9. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. A small number of hedge funds were also right about betting on ICUI as the stock returned 16.9% since the end of the third quarter (through 12/18) and outperformed the market by an even larger margin.

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Disclosure: None. This article was originally published at Insider Monkey.

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