Is Invacare Corporation (NYSE:IVC) a good bet right now? We like to analyze hedge fund sentiment before doing days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy league graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments (for some reason media paid a ton of attention to Ackman’s gigantic JC Penney and Valeant failures) and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.
Is Invacare Corporation (NYSE:IVC) going to take off soon? Prominent investors are in a pessimistic mood. The number of long hedge fund bets decreased by 2 lately. Invacare Corporation (NYSE:IVC) was in 11 hedge funds’ portfolios at the end of the third quarter of 2015. There were 13 hedge funds in our database with Invacare Corporation (NYSE:IVC) holdings at the end of the previous quarter. It may not come as a surprise to the investors tracking the stock performance of the company, as the shares of Invacare Corporation (NYSE:IVC) were down 33.10% during the quarter. We will discuss the hedge funds that held stakes in Invacare Corporation (NYSE:IVC), at the end of the last quarter.
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 INTL Fcstone Inc (NASDAQ:INTL), ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS), and Chuy’s Holdings Inc (NASDAQ:CHUY) to gather more data points.
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Today, there are numerous tools stock market investors put to use to analyze stocks. A pair of the best tools are hedge fund and insider trading signals. We have shown that, historically, those who follow the top picks of the best investment managers can outpace the broader indices by a very impressive margin (see the details here).
With all of this in mind, let’s review the fresh action encompassing Invacare Corporation (NYSE:IVC).
How are hedge funds trading Invacare Corporation (NYSE:IVC)?
At the end of the third quarter, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 15% from the previous quarter. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Rutabaga Capital Management, managed by Peter Schliemann, holds the biggest position in Invacare Corporation (NYSE:IVC). Rutabaga Capital Management has a $19.6 million position in the stock, comprising 2.4% of its 13F portfolio. Sitting at the No. 2 spot is Royce & Associates, managed by Chuck Royce, which holds a $19.5 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other hedge funds and institutional investors that are bullish include Israel Englander’s Millennium Management, Paul Hondros’ AlphaOne Capital Partners, and D E Shaw.
Due to the fact that Invacare Corporation (NYSE:IVC) has witnessed a bearish sentiment from the entirety of the hedge funds we track, it’s safe to say that there was a specific group of hedgies that elected to cut their entire stakes last quarter. At the top of the heap, Ken Griffin’s Citadel Investment Group said goodbye to the largest investment of the “upper crust” of funds monitored by Insider Monkey, worth close to $1.7 million in stock. Chao Ku’s fund, Nine Chapters Capital Management, also sold off its stock, about $0.8 million worth of shares. These transactions are important to note, as total hedge fund interest was cut by 2 funds last quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Invacare Corporation (NYSE:IVC) but similarly valued. These stocks are INTL Fcstone Inc (NASDAQ:INTL), ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS), Chuy’s Holdings Inc (NASDAQ:CHUY), and Westwood Holdings Group, Inc. (NYSE:WHG). All of these stocks’ market caps are closest to Invacare Corporation (NYSE:IVC)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INTL | 14 | 75228 | -3 |
| IMOS | 18 | 163692 | -3 |
| CHUY | 18 | 59520 | 7 |
| WHG | 5 | 85376 | -1 |
As you can see, these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $96 million. That figure was $69 million in Invacare Corporation (NYSE:IVC)’s case. ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS) is the most popular stock in this table. On the other hand, Westwood Holdings Group, Inc. (NYSE:WHG) is the least popular one with only 5 bullish hedge fund positions. Invacare Corporation (NYSE:IVC) 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. In this regard, ChipMOS Technologies (Bermuda) Ltd (NASDAQ:IMOS) might be a better candidate to consider a long position.
