CONMED Corporation (NASDAQ:CNMD) shareholders have witnessed a decrease in hedge fund sentiment of late.
If you’d ask most investors, hedge funds are perceived as underperforming, old financial tools of years past. While there are more than 8000 funds with their doors open today, we choose to focus on the masters of this club, close to 450 funds. It is estimated that this group has its hands on most of all hedge funds’ total asset base, and by monitoring their top stock picks, we have figured out a number of investment strategies that have historically beaten the market. Our small-cap hedge fund strategy outpaced the S&P 500 index by 18 percentage points annually 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 outclassed the S&P 500 index by 23.3 percentage points in 8 months (explore the details and some picks here).
Equally as beneficial, positive insider trading sentiment is a second way to break down the financial markets. There are a number of reasons for a corporate insider to downsize shares of his or her company, but just one, very simple reason why they would behave bullishly. Many empirical studies have demonstrated the market-beating potential of this strategy if shareholders know where to look (learn more here).
Keeping this in mind, let’s take a look at the key action surrounding CONMED Corporation (NASDAQ:CNMD).
What have hedge funds been doing with CONMED Corporation (NASDAQ:CNMD)?
In preparation for this quarter, a total of 11 of the hedge funds we track were bullish in this stock, a change of -21% from the previous quarter. With hedge funds’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially.
Of the funds we track, Stephen DuBois’s Camber Capital Management had the most valuable position in CONMED Corporation (NASDAQ:CNMD), worth close to $34.1 million, accounting for 2.8% of its total 13F portfolio. Coming in second is Cliff Asness of AQR Capital Management, with a $14.9 million position; 0.1% of its 13F portfolio is allocated to the stock. Other peers that are bullish include Mario Gabelli’s GAMCO Investors, Ken Fisher’s Fisher Asset Management and Joel Greenblatt’s Gotham Asset Management.
Judging by the fact that CONMED Corporation (NASDAQ:CNMD) has witnessed a declination in interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few money managers who sold off their positions entirely at the end of the first quarter. Intriguingly, James E. Flynn’s Deerfield Management said goodbye to the largest position of all the hedgies we watch, totaling an estimated $16.6 million in stock., and Jacob Gottlieb of Visium Asset Management was right behind this move, as the fund cut about $1.1 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest dropped by 3 funds at the end of the first quarter.
What have insiders been doing with CONMED Corporation (NASDAQ:CNMD)?
Insider trading activity, especially when it’s bullish, is at its handiest when the company we’re looking at has seen transactions within the past 180 days. Over the latest half-year time frame, CONMED Corporation (NASDAQ:CNMD) has seen zero unique insiders buying, and 11 insider sales (see the details of insider trades here).
Let’s also examine hedge fund and insider activity in other stocks similar to CONMED Corporation (NASDAQ:CNMD). These stocks are Volcano Corporation (NASDAQ:VOLC), Masimo Corporation (NASDAQ:MASI), ArthroCare Corporation (NASDAQ:ARTC), NuVasive, Inc. (NASDAQ:NUVA), and Wright Medical Group Inc (NASDAQ:WMGI). All of these stocks are in the medical appliances & equipment industry and their market caps are closest to CNMD’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Volcano Corporation (NASDAQ:VOLC) | 18 | 1 | 7 |
| Masimo Corporation (NASDAQ:MASI) | 17 | 0 | 1 |
| ArthroCare Corporation (NASDAQ:ARTC) | 23 | 0 | 1 |
| NuVasive, Inc. (NASDAQ:NUVA) | 18 | 1 | 1 |
| Wright Medical Group Inc (NASDAQ:WMGI) | 26 | 0 | 6 |
With the returns shown by our tactics, retail investors should always pay attention to hedge fund and insider trading sentiment, and CONMED Corporation (NASDAQ:CNMD) shareholders fit into this picture quite nicely.
