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Were Hedge Funds Right About Dumping BioTelemetry, Inc. (BEAT)?

Nina Todic

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 28, so let’s proceed with the discussion of the hedge fund sentiment on BioTelemetry, Inc. (NASDAQ:BEAT).

BioTelemetry, Inc. (NASDAQ:BEAT) has seen a decrease in hedge fund sentiment in recent months. Our calculations also showed that BEAT isn't among the 30 most popular stocks among hedge funds (see the video below). Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

5 Most Popular Stocks Among Hedge Funds

At the moment there are numerous tools investors have at their disposal to size up publicly traded companies. Some of the most innovative tools are hedge fund and insider trading moves. We have shown that, historically, those who follow the best picks of the best fund managers can beat the broader indices by a superb amount (see the details here).

Michael Castor Sio Capital

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn't rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We're going to take a look at the new hedge fund action encompassing BioTelemetry, Inc. (NASDAQ:BEAT).

How have hedgies been trading BioTelemetry, Inc. (NASDAQ:BEAT)?

At the end of the second quarter, a total of 16 of the hedge funds tracked by Insider Monkey were long this stock, a change of -24% from one quarter earlier. By comparison, 15 hedge funds held shares or bullish call options in BEAT a year ago. With hedge funds' positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

No of Hedge Funds with BEAT Positions

More specifically, Sio Capital was the largest shareholder of BioTelemetry, Inc. (NASDAQ:BEAT), with a stake worth $7.4 million reported as of the end of March. Trailing Sio Capital was Citadel Investment Group, which amassed a stake valued at $6.1 million. GLG Partners, Marshall Wace LLP, and Balyasny Asset Management were also very fond of the stock, giving the stock large weights in their portfolios.

Judging by the fact that BioTelemetry, Inc. (NASDAQ:BEAT) has witnessed falling interest from the aggregate hedge fund industry, it's easy to see that there lies a certain "tier" of hedgies that elected to cut their positions entirely by the end of the second quarter. Intriguingly, John Osterweis's Osterweis Capital Management sold off the biggest investment of all the hedgies tracked by Insider Monkey, totaling about $6.4 million in stock, and Peter Muller's PDT Partners was right behind this move, as the fund sold off about $5.8 million worth. These moves are important to note, as total hedge fund interest fell by 5 funds by the end of the second quarter.

Let's go over hedge fund activity in other stocks - not necessarily in the same industry as BioTelemetry, Inc. (NASDAQ:BEAT) but similarly valued. We will take a look at Callaway Golf Company (NYSE:ELY), Park National Corporation (NYSE:PRK), Heartland Financial USA Inc (NASDAQ:HTLF), and Antero Resources Corporation (NYSE:AR). This group of stocks' market caps match BEAT's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ELY,20,215556,-6 PRK,8,15051,3 HTLF,8,23414,0 AR,30,638778,3 Average,16.5,223200,0 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $223 million. That figure was $38 million in BEAT's case. Antero Resources Corporation (NYSE:AR) is the most popular stock in this table. On the other hand Park National Corporation (NYSE:PRK) is the least popular one with only 8 bullish hedge fund positions. BioTelemetry, Inc. (NASDAQ:BEAT) is not the least popular stock in this group but hedge fund interest is still below average. 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 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately BEAT wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); BEAT investors were disappointed as the stock returned -15.4% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.

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

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