The third-quarter stock market correction has turned out to resemble the situation observed during the Asian financial crisis of 1997. The two relatively short-lived corrections occurred at a time with stable interest rates, falling commodity markets, with strong-performing technology and healthcare sectors, and struggling energy sector. Similarly, the two corrections followed long periods without a correction, which had to come sooner or later and it did. Even so, several prominent hedge fund investors publicly asserted their bearish view on the current state of the U.S. equity markets, suggesting that they significantly cut their exposure to equities during the latest quarter. Having said that, it would be worthwhile to take a look at the hedge fund sentiment on Orthofix International NV (NASDAQ:OFIX) in order to identify whether reputable and successful top money managers continue to believe in its potential.
Is Orthofix International NV a buy, sell, or hold? The smart money is turning bullish. The number of bullish hedge fund bets rose by 2 in recent months. OFIX was in 21 hedge funds’ portfolios at the end of September. There were 19 hedge funds in our database with OFIX holdings at the end of the previous quarter. 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 Osiris Therapeutics, Inc. (NASDAQ:OSIR), Blackstone / GSO Strategic Credit Fund (NYSE:BGB), and Foundation Medicine Inc (NASDAQ:FMI) to gather more data points.
In the eyes of most market participants, hedge funds are assumed to be unimportant, outdated investment tools of years past. While there are greater than 8000 funds with their doors open at present, Our experts choose to focus on the aristocrats of this club, about 700 funds. Most estimates calculate that this group of people watch over the majority of the hedge fund industry’s total capital, and by monitoring their best stock picks, Insider Monkey has come up with many investment strategies that have historically surpassed the market. Insider Monkey’s small-cap hedge fund strategy outstripped the S&P 500 index by 12 percentage points a year for a decade in their back tests.
Now, let’s view the recent action surrounding Orthofix International NV (NASDAQ:OFIX).
How have hedgies been trading Orthofix International NV (NASDAQ:OFIX)?
Heading into Q4, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 11% from one quarter earlier. With the smart money’s capital changing hands, there exists a few notable hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Mitchell Blutt’s Consonance Capital Management has the biggest position in Orthofix International NV (NASDAQ:OFIX), worth close to $60.3 million, accounting for 8.5% of its total 13F portfolio. The second largest stake is held by Camber Capital Management, led by Stephen DuBois, holding a $50.6 million position; the fund has 4.3% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors with similar optimism consist of Conan Laughlin’s North Tide Capital, James E. Flynn’s Deerfield Management and Israel Englander’s Millennium Management.
As industrywide interest jumped, key money managers were breaking ground themselves. Ellington, managed by Mike Vranos, assembled the biggest position in Orthofix International NV (NASDAQ:OFIX). Ellington had $0.4 million invested in the company at the end of the quarter. Peter Muller’s PDT Partners also made a $0.3 million investment in the stock during the quarter. The only other fund with a brand new OFIX position is Glenn Russell Dubin’s Highbridge Capital Management.
Let’s now take a look at hedge fund activity in other stocks similar to Orthofix International NV (NASDAQ:OFIX). We will take a look at Osiris Therapeutics, Inc. (NASDAQ:OSIR), Blackstone / GSO Strategic Credit Fund (NYSE:BGB), Foundation Medicine Inc (NASDAQ:FMI), and Quidel Corporation (NASDAQ:QDEL). This group of stocks’ market caps resemble OFIX’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $245 million in OFIX’s case. Quidel Corporation (NASDAQ:QDEL) is the most popular stock in this table. On the other hand Blackstone / GSO Strategic Credit Fund (NYSE:BGB) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Orthofix International NV (NASDAQ:OFIX), with 21 bullish hedge fund positions, is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.