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This Metric Says You Are Smart to Buy Merit Medical Systems, Inc. (MMSI): Conceptus, Inc. (CPTS), Atrion Corporation (ATRI)

Is Merit Medical Systems, Inc. (NASDAQ:MMSI) a healthy stock for your portfolio? Money managers are betting on the stock. The number of bullish hedge fund positions went up by 5 lately.

Merit Medical Systems, Inc. (NASDAQ:MMSI)

In the eyes of most stock holders, hedge funds are assumed to be slow, outdated investment tools of the past. While there are over 8000 funds trading at present, we at Insider Monkey look at the elite of this club, around 450 funds. Most estimates calculate that this group has its hands on the lion’s share of all hedge funds’ total asset base, and by keeping an eye on their top investments, we have deciphered a number of investment strategies that have historically outperformed the S&P 500 index. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have trumped the S&P 500 index by 25 percentage points in 6.5 month (see the details here).

Just as integral, positive insider trading sentiment is a second way to break down the investments you’re interested in. There are a variety of incentives for a corporate insider to downsize shares of his or her company, but just one, very clear reason why they would buy. Several empirical studies have demonstrated the impressive potential of this strategy if “monkeys” understand where to look (learn more here).

With these “truths” under our belt, it’s important to take a glance at the recent action surrounding Merit Medical Systems, Inc. (NASDAQ:MMSI).

What have hedge funds been doing with Merit Medical Systems, Inc. (NASDAQ:MMSI)?

At year’s end, a total of 13 of the hedge funds we track were bullish in this stock, a change of 63% from one quarter earlier. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their stakes significantly.

Of the funds we track, Royce & Associates, managed by Chuck Royce, holds the most valuable position in Merit Medical Systems, Inc. (NASDAQ:MMSI). Royce & Associates has a $24 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is Broadfin Capital, managed by Kevin Kotler, which held a $14 million position; 0% of its 13F portfolio is allocated to the stock. Some other hedge funds that are bullish include Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners, Ken Gray and Steve Walsh’s Bryn Mawr Capital and Ken Griffin’s Citadel Investment Group.

As aggregate interest increased, key hedge funds have jumped into Merit Medical Systems, Inc. (NASDAQ:MMSI) headfirst. Bryn Mawr Capital, managed by Ken Gray and Steve Walsh, established the biggest position in Merit Medical Systems, Inc. (NASDAQ:MMSI). Bryn Mawr Capital had 0 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0 million investment in the stock during the quarter. The other funds with new positions in the stock are SAC Subsidiary’s Sigma Capital Management, Paul Tudor Jones’s Tudor Investment Corp, and Cliff Asness’s AQR Capital Management.

How have insiders been trading Merit Medical Systems, Inc. (NASDAQ:MMSI)?

Insider trading activity, especially when it’s bullish, is most useful when the company we’re looking at has experienced transactions within the past half-year. Over the latest half-year time frame, Merit Medical Systems, Inc. (NASDAQ:MMSI) has seen zero unique insiders buying, and zero insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Merit Medical Systems, Inc. (NASDAQ:MMSI). These stocks are Conceptus, Inc. (NASDAQ:CPTS), Atrion Corporation (NASDAQ:ATRI), Luminex Corporation (NASDAQ:LMNX), AngioDynamics, Inc. (NASDAQ:ANGO), and Antares Pharma Inc (NASDAQ:ATRS). This group of stocks are the members of the medical instruments & supplies industry and their market caps resemble MMSI’s market cap.

Company Name # of Hedge Funds # of Insiders Buying # of Insiders Selling
Conceptus, Inc. (NASDAQ:CPTS) 9 0 3
Atrion Corporation (NASDAQ:ATRI) 3 0 0
Luminex Corporation (NASDAQ:LMNX) 8 0 2
AngioDynamics, Inc. (NASDAQ:ANGO) 10 4 1
Antares Pharma Inc (NASDAQ:ATRS) 7 1 2

With the returns exhibited by Insider Monkey’s time-tested strategies, everyday investors should always monitor hedge fund and insider trading activity, and Merit Medical Systems, Inc. (NASDAQ:MMSI) is an important part of this process.

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