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Is Cerner Corporation (CERN) A Good Stock To Buy?

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Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility. The time period between June 25 and the end of October was one of those periods, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points. Given that the funds we track tend to have a disproportionate amount of their portfolios in smaller cap stocks, they have seen some volatility in their portfolios too. Actually, their moves are potentially one of the factors that contributed to this volatility. In this article, we use our extensive database of hedge fund holdings to find out what the smart money thinks of Cerner Corporation (NASDAQ:CERN).

Cerner Corporation (NASDAQ:CERN) investors should pay attention to an increase in support from the world’s most elite money managers in recent months. 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 Zoetis Inc (NYSE:ZTS), Edison International (NYSE:EIX), and AmerisourceBergen Corp. (NYSE:ABC) to gather more data points.

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According to most shareholders, hedge funds are viewed as slow, old investment vehicles of yesteryear. While there are greater than an 8000 funds trading today, We hone in on the elite of this club, around 700 funds. These money managers control the lion’s share of the smart money’s total capital, and by tailing their best stock picks, Insider Monkey has discovered a number of investment strategies that have historically outperformed the broader indices. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per annum for a decade in their back tests.

Now, let’s analyze the recent action surrounding Cerner Corporation (NASDAQ:CERN).

What does the smart money think about Cerner Corporation (NASDAQ:CERN)?

Heading into Q4, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, inching up by 7% from one quarter earlier. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital has the most valuable position in Cerner Corporation (NASDAQ:CERN), worth close to $102.8 million, amounting to 0.5% of its total 13F portfolio. Coming in second is Echo Street Capital Management, managed by Greg Poole, which holds a $36.7 million position; the fund has 1.4% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions contain Ken Griffin’s Citadel Investment Group, Phill Gross and Robert Atchinson’s Adage Capital Management and Israel Englander’s Millennium Management.

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