You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make a proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
CorMedix Inc. (NYSEMKT:CRMD) has experienced a decrease in activity from the world’s largest hedge funds of late. CorMedix Inc. (NYSEMKT:CRMD) was in four hedge funds’ portfolios at the end of the third quarter of 2015. There were six hedge funds in our database with CorMedix Inc. (NYSEMKT:CRMD) positions at the end of the previous quarter. At the end of this article, we will also compare CRMD to other stocks, including NanoViricides Inc (NYSEMKT:NNVC), TearLab Corporation (NASDAQ:TEAR), and Datawatch Corporation (NASDAQ:DWCH) to get a better sense of its popularity.
If you’d ask most investors, hedge funds are viewed as slow, outdated financial vehicles of the past. While there are greater than 8000 funds with their doors open at the moment, our researchers hone in on the aristocrats of this club, approximately 700 funds. Most estimates calculate that this group of people preside over the majority of all hedge funds’ total asset base, and by following their first-class equity investments, Insider Monkey has uncovered several investment strategies that have historically outperformed the S&P 500 index. Insider Monkey’s small-cap hedge fund strategy beat the S&P 500 index by 12 percentage points annually for a decade in their back tests.
Now, we’re going to take a peek at the fresh action surrounding CorMedix Inc. (NYSEMKT:CRMD).
Hedge fund activity in CorMedix Inc. (NYSEMKT:CRMD)
At the end of Q3, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a decline of 33% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Elliott Management, managed by Paul Singer, holds the largest position in CorMedix Inc. (NYSEMKT:CRMD). Elliott Management has a $3 million position in the stock, comprising 0.1% of its 13F portfolio. Sitting at the No. 2 spot is AQR Capital Management, led by Cliff Asness, holding a $0.8 million position; less than 0.1% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism comprise Matthew Hulsizer’s PEAK6 Capital Management and Ken Griffin’s Citadel Investment Group.
Because CorMedix Inc. (NYSEMKT:CRMD) has witnessed declining sentiment from the smart money, it’s safe to say that there were a few hedgies that slashed their full holdings in the third quarter. Interestingly, Israel Englander’s Millennium Management said goodbye to the biggest position of the 700 funds tracked by Insider Monkey, worth close to $0.1 million in stock. Glenn Russell Dubin’s fund, Highbridge Capital Management, also said goodbye to its stock, about $44,000 worth. These transactions are interesting, as total hedge fund interest was cut by 2 funds in the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as CorMedix Inc. (NYSEMKT:CRMD) but similarly valued. We will take a look at NanoViricides Inc (NYSEMKT:NNVC), TearLab Corporation (NASDAQ:TEAR), Datawatch Corporation (NASDAQ:DWCH), and AVEO Pharmaceuticals, Inc. (NASDAQ:AVEO). This group of stock market valuations matches CorMedix Inc. (NYSEMKT:CRMD)’s market valuation.
|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 5 hedge funds with bullish positions and the average amount invested in these stocks was $5 million. The aggregate value of hedge funds’ holdings in CorMedix stands at $4 million, which is below the average and the stock is the least popular in this group. Hedge funds might have tons of reasons not to be fond of CorMedix and without a more complex analysis you cannot know for sure whether or not it represents a good investment. However, we prefer to follow the smart money into stocks that they are collectively the most bullish on, and, in this case, AVEO or DWCH represent better alternatives.