Did Hedge Funds Get ICU Medical, Inc. (ICUI) Right?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought ICU Medical, Inc. (NASDAQ:ICUI) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.

Is ICU Medical, Inc. (NASDAQ:ICUI) undervalued? The best stock pickers were betting on the stock. The number of bullish hedge fund positions increased by 4 lately. ICU Medical, Inc. (NASDAQ:ICUI) was in 31 hedge funds’ portfolios at the end of September. The all time high for this statistic is 35. Our calculations also showed that ICUI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 27 hedge funds in our database with ICUI positions at the end of the second quarter.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind let’s take a glance at the latest hedge fund action surrounding ICU Medical, Inc. (NASDAQ:ICUI).

Do Hedge Funds Think ICUI Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 31 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 15% from the previous quarter. On the other hand, there were a total of 31 hedge funds with a bullish position in ICUI a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Nitorum Capital, managed by Seth Rosen, holds the largest position in ICU Medical, Inc. (NASDAQ:ICUI). Nitorum Capital has a $59 million position in the stock, comprising 2.8% of its 13F portfolio. Coming in second is Redmile Group, led by Jeremy Green, holding a $51.9 million position; 0.9% of its 13F portfolio is allocated to the company. Some other members of the smart money with similar optimism comprise Christopher James’s Partner Fund Management, and Efrem Kamen’s Pura Vida Investments. In terms of the portfolio weights assigned to each position Nitorum Capital allocated the biggest weight to ICU Medical, Inc. (NASDAQ:ICUI), around 2.8% of its 13F portfolio. Tamarack Capital Management is also relatively very bullish on the stock, dishing out 2.58 percent of its 13F equity portfolio to ICUI.

As aggregate interest increased, some big names have jumped into ICU Medical, Inc. (NASDAQ:ICUI) headfirst. Balyasny Asset Management, managed by Dmitry Balyasny, initiated the biggest position in ICU Medical, Inc. (NASDAQ:ICUI). Balyasny Asset Management had $20.6 million invested in the company at the end of the quarter. Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management also made a $5.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Alec Litowitz and Ross Laser’s Magnetar Capital, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Matthew Hulsizer’s PEAK6 Capital Management.

Let’s check out hedge fund activity in other stocks similar to ICU Medical, Inc. (NASDAQ:ICUI). These stocks are AllianceBernstein Holding LP (NYSE:AB), Kodiak Sciences Inc (NASDAQ:KOD), Webster Financial Corporation (NYSE:WBS), Science Applications International Corp (NYSE:SAIC), Essent Group Ltd (NYSE:ESNT), Tenable Holdings, Inc. (NASDAQ:TENB), and Alteryx, Inc. (NYSE:AYX). This group of stocks’ market caps are similar to ICUI’s market cap.

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As you can see these stocks had an average of 20.7 hedge funds with bullish positions and the average amount invested in these stocks was $601 million. That figure was $382 million in ICUI’s case. Alteryx, Inc. (NYSE:AYX) is the most popular stock in this table. On the other hand AllianceBernstein Holding LP (NYSE:AB) is the least popular one with only 8 bullish hedge fund positions. ICU Medical, Inc. (NASDAQ:ICUI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ICUI is 75.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and beat the market again by 3.6 percentage points. Unfortunately, ICUI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ICUI were disappointed as the stock returned -8.6% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.

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