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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Fonar Corporation (NASDAQ:FONR).
Hedge fund interest in Fonar Corporation (NASDAQ:FONR) shares was flat at the end of last quarter. This is usually a negative indicator. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Erytech Pharma S.A. (NASDAQ:ERYP), Plumas Bancorp (NASDAQ:PLBC), and CONSOL Energy Inc. (NYSE:CEIX) to gather more data points. Our calculations also showed that FONR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (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 leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s take a peek at the fresh hedge fund action regarding Fonar Corporation (NASDAQ:FONR).
How have hedgies been trading Fonar Corporation (NASDAQ:FONR)?
At the end of the first quarter, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in FONR over the last 18 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Renaissance Technologies, holds the biggest position in Fonar Corporation (NASDAQ:FONR). Renaissance Technologies has a $7.4 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, managed by Israel Englander, which holds a $0.5 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers that hold long positions comprise Noam Gottesman’s GLG Partners, John Overdeck and David Siegel’s Two Sigma Advisors and David Harding’s Winton Capital Management. In terms of the portfolio weights assigned to each position Renaissance Technologies allocated the biggest weight to Fonar Corporation (NASDAQ:FONR), around 0.01% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, designating 0.01 percent of its 13F equity portfolio to FONR.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: ExodusPoint Capital. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Citadel Investment Group).
Let’s also examine hedge fund activity in other stocks similar to Fonar Corporation (NASDAQ:FONR). These stocks are Erytech Pharma S.A. (NASDAQ:ERYP), Plumas Bancorp (NASDAQ:PLBC), CONSOL Energy Inc. (NYSE:CEIX), and Cumulus Media Inc (NASDAQ:CMLS). This group of stocks’ market caps resemble FONR’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $9 million in FONR’s case. CONSOL Energy Inc. (NYSE:CEIX) is the most popular stock in this table. On the other hand Erytech Pharma S.A. (NASDAQ:ERYP) is the least popular one with only 2 bullish hedge fund positions. Fonar Corporation (NASDAQ:FONR) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.4% in 2020 through June 22nd but still beat the market by 15.9 percentage points. Hedge funds were also right about betting on FONR as the stock returned 62% in Q2 (through June 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.