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iRhythm Technologies, Inc. (IRTC): Hedge Fund Sentiment Unchanged

·6 min read

After several tireless days we have finished crunching the numbers from nearly 900 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 March 31st. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards iRhythm Technologies, Inc. (NASDAQ:IRTC).

iRhythm Technologies, Inc. (NASDAQ:IRTC) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 19 hedge funds' portfolios at the end of the first quarter of 2021. Our calculations also showed that IRTC isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare IRTC to other stocks including Resideo Technologies, Inc. (NYSE:REZI), QTS Realty Trust Inc (NYSE:QTS), and Allegiant Travel Company (NASDAQ:ALGT) to get a better sense of its popularity.

If you'd ask most traders, hedge funds are perceived as slow, old financial vehicles of years past. While there are over 8000 funds in operation at the moment, We look at the crème de la crème of this group, approximately 850 funds. These investment experts control the lion's share of the smart money's total asset base, and by paying attention to their highest performing stock picks, Insider Monkey has determined a number of investment strategies that have historically outpaced Mr. Market. Insider Monkey's flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Kris Jenner - Rock Springs Capital
Kris Jenner - Rock Springs Capital

Kris Jenner of Rock Springs Capital Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind let's check out the latest hedge fund action encompassing iRhythm Technologies, Inc. (NASDAQ:IRTC).

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

At the end of the first quarter, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in IRTC over the last 23 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is IRTC A Good Stock To Buy?
Is IRTC A Good Stock To Buy?

According to Insider Monkey's hedge fund database, Rock Springs Capital Management, managed by Kris Jenner, Gordon Bussard, Graham McPhail, holds the biggest position in iRhythm Technologies, Inc. (NASDAQ:IRTC). Rock Springs Capital Management has a $60.1 million position in the stock, comprising 1.3% of its 13F portfolio. Sitting at the No. 2 spot is Citadel Investment Group, led by Ken Griffin, holding a $25.6 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism contain Renaissance Technologies, Noam Gottesman's GLG Partners and Anand Parekh's Alyeska Investment Group. In terms of the portfolio weights assigned to each position Rock Springs Capital Management allocated the biggest weight to iRhythm Technologies, Inc. (NASDAQ:IRTC), around 1.31% of its 13F portfolio. Motley Fool Asset Management is also relatively very bullish on the stock, designating 0.3 percent of its 13F equity portfolio to IRTC.

Since iRhythm Technologies, Inc. (NASDAQ:IRTC) has witnessed declining sentiment from the entirety of the hedge funds we track, we can see that there were a few funds who sold off their full holdings by the end of the first quarter. Interestingly, Christopher James's Partner Fund Management cut the biggest investment of the "upper crust" of funds tracked by Insider Monkey, worth an estimated $40.6 million in stock, and Jerome Pfund and Michael Sjostrom's Sectoral Asset Management was right behind this move, as the fund dropped about $25.3 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).

Let's check out hedge fund activity in other stocks - not necessarily in the same industry as iRhythm Technologies, Inc. (NASDAQ:IRTC) but similarly valued. These stocks are Resideo Technologies, Inc. (NYSE:REZI), QTS Realty Trust Inc (NYSE:QTS), Allegiant Travel Company (NASDAQ:ALGT), Watts Water Technologies Inc (NYSE:WTS), Itron, Inc. (NASDAQ:ITRI), SmileDirectClub, Inc. (NASDAQ:SDC), and Terreno Realty Corporation (NYSE:TRNO). All of these stocks' market caps are similar to IRTC's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position REZI,27,666840,-4 QTS,22,451242,-1 ALGT,22,402206,3 WTS,18,398034,0 ITRI,29,365455,23 SDC,21,177116,-4 TRNO,12,43004,3 Average,21.6,357700,2.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.6 hedge funds with bullish positions and the average amount invested in these stocks was $358 million. That figure was $153 million in IRTC's case. Itron, Inc. (NASDAQ:ITRI) is the most popular stock in this table. On the other hand Terreno Realty Corporation (NYSE:TRNO) is the least popular one with only 12 bullish hedge fund positions. iRhythm Technologies, Inc. (NASDAQ:IRTC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IRTC is 47.5. 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. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately IRTC wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); IRTC investors were disappointed as the stock returned -61.8% since the end of March (through 7/16) 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 in 2021.

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