Hedge Funds Are Selling Zynex, Inc. (ZYXI)

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 866 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 March 31st. In this article we look at what those investors think of Zynex, Inc. (NASDAQ:ZYXI).

Zynex, Inc. (NASDAQ:ZYXI) has experienced a decrease in support from the world’s most elite money managers recently. Zynex, Inc. (NASDAQ:ZYXI) was in 6 hedge funds’ portfolios at the end of March. The all time high for this statistic is 10. Our calculations also showed that ZYXI isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery 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. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind let’s take a gander at the key hedge fund action surrounding Zynex, Inc. (NASDAQ:ZYXI).

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

At the end of the first quarter, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of -25% from the previous quarter. On the other hand, there were a total of 7 hedge funds with a bullish position in ZYXI a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Millennium Management held the most valuable stake in Zynex, Inc. (NASDAQ:ZYXI), which was worth $4.6 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $1.5 million worth of shares. Citadel Investment Group, Balyasny Asset Management, and Algert Global were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position 0 allocated the biggest weight to Zynex, Inc. (NASDAQ:ZYXI), around 0.22% of its 13F portfolio. 0 is also relatively very bullish on the stock, earmarking 0.0043 percent of its 13F equity portfolio to ZYXI.

Judging by the fact that Zynex, Inc. (NASDAQ:ZYXI) has faced bearish sentiment from the smart money, it’s easy to see that there lies a certain “tier” of fund managers that elected to cut their full holdings in the first quarter. At the top of the heap, Chuck Royce’s Royce & Associates said goodbye to the largest position of the “upper crust” of funds watched by Insider Monkey, valued at an estimated $0.4 million in stock. Roger Ibbotson’s fund, Zebra Capital Management, also dumped its stock, about $0.3 million worth. These moves are important to note, as total hedge fund interest fell by 2 funds in the first quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Zynex, Inc. (NASDAQ:ZYXI) but similarly valued. We will take a look at Aptose Biosciences Inc (NASDAQ:APTO), Electrameccanica Vehicles Corp. (NASDAQ:SOLO), AMMO, Inc. (NASDAQ:POWW), Lizhi Inc. (NASDAQ:LIZI), iCAD Inc (NASDAQ:ICAD), First Community Bancshares Inc (NASDAQ:FCBC), and Mercantile Bank Corp. (NASDAQ:MBWM). All of these stocks’ market caps are similar to ZYXI’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 9.4 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $8 million in ZYXI’s case. Aptose Biosciences Inc (NASDAQ:APTO) is the most popular stock in this table. On the other hand Lizhi Inc. (NASDAQ:LIZI) is the least popular one with only 3 bullish hedge fund positions. Zynex, Inc. (NASDAQ:ZYXI) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ZYXI is 28.5. 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 negative signal and 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 19.3% in 2021 through June 25th and surpassed the market again by 4.8 percentage points. Unfortunately ZYXI wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ZYXI investors were disappointed as the stock returned 4.5% since the end of March (through 6/25) 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 most of these stocks already outperformed the market in 2021.

Suggested Articles:

• How to Best Use Insider Monkey To Increase Your Returns
• 10 Best ASX Stocks to Buy Now
• 15 Biggest Travel Companies

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