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Hedge Fund Sentiment Is Stagnant On Vericel Corp (VCEL)

At Insider Monkey we follow around 730 of the best-performing investors and even though many of them lost money in the last several months, the history teaches us that over the long-run they still manage to beat the market, which is why it can be profitable for us to imitate their activity. Of course, even the best money managers can sometimes get it wrong, but following some of their picks gives us a better chance to outperform the crowd than picking a random stock and this is where our research comes in.

Hedge fund interest in Vericel Corp (NASDAQ:VCEL) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Town Sports International Holdings, Inc. (NASDAQ:CLUB), Ion Geophysical Corp (NYSE:IO), and Global Power Equipment Group Inc (NASDAQ:GLPW) to gather more data points.

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In today’s marketplace there are a lot of tools stock traders employ to evaluate publicly traded companies. A couple of the less known tools are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the best money managers can outperform the S&P 500 by a healthy amount (see the details here).

With all of this in mind, we’re going to take a look at the fresh action encompassing Vericel Corp (NASDAQ:VCEL).

How have hedgies been trading Vericel Corp (NASDAQ:VCEL)?

At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Consonance Capital Management, managed by Mitchell Blutt, holds the largest position in Vericel Corp (NASDAQ:VCEL). Consonance Capital Management has a $6.4 million position in the stock, comprising 0.9% of its 13F portfolio. The second largest stake is held by Jeffrey Jay and David Kroin of Great Point Partners, with a $5.7 million position; 2.2% of its 13F portfolio is allocated to the company. Other professional money managers that hold long positions consist of Jacob Gottlieb’s Visium Asset Management, Kurt von Emster’s venBio Select Advisor and Joseph Edelman’s Perceptive Advisors.

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 third 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 go over hedge fund activity in other stocks – not necessarily in the same industry as Vericel Corp (NASDAQ:VCEL) but similarly valued. These stocks are Town Sports International Holdings, Inc. (NASDAQ:CLUB), Ion Geophysical Corp (NYSE:IO), Global Power Equipment Group Inc (NASDAQ:GLPW), and S&W Seed Company (NASDAQ:SANW). This group of stocks’ market caps are closest to VCEL’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CLUB 6 23671 0
IO 11 2217 0
GLPW 14 21542 -1
SANW 5 8106 -1

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $21 million in VCEL’s case. Global Power Equipment Group Inc (NASDAQ:GLPW) is the most popular stock in this table. On the other hand, S&W Seed Company (NASDAQ:SANW) is the least popular one with only 5 bullish hedge fund positions. Even though Vericel Corp (NASDAQ:VCEL), with 6 bullish hedge fund positions is not the least popular stock in this group, it has not attracted much attention from investors. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are collectively most bullish on, such as GLPW in this particular case.

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