Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about INMODE LTD. (NASDAQ:INMD).
Is INMODE LTD. (NASDAQ:INMD) a superb investment today? Money managers were betting on the stock. The number of long hedge fund positions rose by 3 in recent months. INMODE LTD. (NASDAQ:INMD) was in 26 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 23. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that INMD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
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David Siegel of Two Sigma Advisors
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Do Hedge Funds Think INMD Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 26 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the first quarter of 2020. By comparison, 11 hedge funds held shares or bullish call options in INMD a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in INMODE LTD. (NASDAQ:INMD) was held by Renaissance Technologies, which reported holding $65.2 million worth of stock at the end of June. It was followed by Two Sigma Advisors with a $50.6 million position. Other investors bullish on the company included Miura Global Management, Citadel Investment Group, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Ariose Capital allocated the biggest weight to INMODE LTD. (NASDAQ:INMD), around 20.4% of its 13F portfolio. Miura Global Management is also relatively very bullish on the stock, earmarking 6.05 percent of its 13F equity portfolio to INMD.
Now, key money managers were leading the bulls’ herd. Ariose Capital, managed by Yi Xin, assembled the most outsized position in INMODE LTD. (NASDAQ:INMD). Ariose Capital had $6.2 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $4.8 million position during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, and Ryan Caldwell’s Chiron Investment Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as INMODE LTD. (NASDAQ:INMD) but similarly valued. We will take a look at ViaSat, Inc. (NASDAQ:VSAT), Riot Blockchain, Inc (NASDAQ:RIOT), Poshmark, Inc. (NASDAQ:POSH), CommVault Systems, Inc. (NASDAQ:CVLT), GoHealth, Inc. (NASDAQ:GOCO), Mercury General Corporation (NYSE:MCY), and Genius Sports Ltd (NYSE:GENI). This group of stocks’ market values are closest to INMD’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| VSAT | 22 | 1260800 | -4 |
| RIOT | 17 | 100716 | 5 |
| POSH | 15 | 57334 | 1 |
| CVLT | 28 | 693176 | 5 |
| GOCO | 14 | 483021 | -3 |
| MCY | 14 | 175204 | -6 |
| GENI | 39 | 375026 | 39 |
| Average | 21.3 | 449325 | 5.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.3 hedge funds with bullish positions and the average amount invested in these stocks was $449 million. That figure was $298 million in INMD’s case. Genius Sports Ltd (NYSE:GENI) is the most popular stock in this table. On the other hand GoHealth, Inc. (NASDAQ:GOCO) is the least popular one with only 14 bullish hedge fund positions. INMODE LTD. (NASDAQ:INMD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for INMD is 62. 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. 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on INMD as the stock returned 76.1% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Inmode Ltd. (NASDAQ:INMD)
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Disclosure: None. This article was originally published at Insider Monkey.
