Itamar Medical Ltd. (ITMR): Hedge Funds Are Missing Out?
The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 752 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of September 30th. In this article we look at what those investors think of Itamar Medical Ltd. (NASDAQ:ITMR).
Itamar Medical Ltd. (NASDAQ:ITMR) shares haven't seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 2 hedge funds' portfolios at the end of the third quarter of 2019. At the end of this article we will also compare ITMR to other stocks including Magal Security Systems Ltd. (NASDAQ:MAGS), Horizon Global Corp (NYSE:HZN), and Lakeland Industries, Inc. (NASDAQ:LAKE) to get a better sense of its popularity.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds' large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the Russell 2000 ETFs by 40 percentage points since May 2014 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that'll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.8% through November 21, 2019. That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let's go over the recent hedge fund action regarding Itamar Medical Ltd. (NASDAQ:ITMR).
Hedge fund activity in Itamar Medical Ltd. (NASDAQ:ITMR)
At Q3's end, a total of 2 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in ITMR over the last 17 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Deerfield Management held the most valuable stake in Itamar Medical Ltd. (NASDAQ:ITMR), which was worth $2.7 million at the end of the third quarter. On the second spot was Noked Capital which amassed $1.6 million worth of shares which was ranked #1 best performing hedge fund in Q3 among the 750 hedge funds tracked by Insider Monkey.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren't any hedge funds dumping their holdings during the second quarter, there weren't any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven't identified any viable catalysts that can attract investor attention.
Let's check out hedge fund activity in other stocks similar to Itamar Medical Ltd. (NASDAQ:ITMR). We will take a look at Magal Security Systems Ltd. (NASDAQ:MAGS), Horizon Global Corp (NYSE:HZN), Lakeland Industries, Inc. (NASDAQ:LAKE), and CPI Aerostructures, Inc. (NYSE:CVU). This group of stocks' market valuations are closest to ITMR's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MAGS,3,2695,0 HZN,4,9074,1 LAKE,4,27103,0 CVU,5,10430,0 Average,4,12326,0.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $4 million in ITMR's case. CPI Aerostructures, Inc. (NYSE:CVU) is the most popular stock in this table. On the other hand Magal Security Systems Ltd. (NASDAQ:MAGS) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks Itamar Medical Ltd. (NASDAQ:ITMR) is even less popular than MAGS. Hedge funds clearly dropped the ball on ITMR as the stock delivered strong returns, though hedge funds' consensus picks still generated respectable returns. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Only Deerfield and Noked were right about betting on ITMR as the stock returned 16% during the fourth quarter (through 11/22) and outperformed the market by an even larger margin. By the way, Noked Capital's other stock picks performed actually better than ITMR.
Disclosure: None. This article was originally published at Insider Monkey.
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