At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not BioTelemetry, Inc. (NASDAQ:BEAT) makes for a good investment right now.
Is BEAT a good stock to buy now? BioTelemetry, Inc. (NASDAQ:BEAT) was in 17 hedge funds’ portfolios at the end of September. The all time high for this statistic is 24. BEAT has seen an increase in activity from the world’s largest hedge funds of late. There were 16 hedge funds in our database with BEAT positions at the end of the second quarter. Our calculations also showed that BEAT isn’t among the 30 most popular stocks among hedge funds (click for Q3 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 website. Now we’re going to take a glance at the new hedge fund action surrounding BioTelemetry, Inc. (NASDAQ:BEAT).
Do Hedge Funds Think BEAT Is A Good Stock To Buy Now?
At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in BEAT over the last 21 quarters. With the smart money’s capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their holdings considerably (or already accumulated large positions).
More specifically, Millennium Management was the largest shareholder of BioTelemetry, Inc. (NASDAQ:BEAT), with a stake worth $39.8 million reported as of the end of September. Trailing Millennium Management was Royce & Associates, which amassed a stake valued at $11.6 million. Cannell Capital, Balyasny Asset Management, and GLG Partners 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 Cannell Capital allocated the biggest weight to BioTelemetry, Inc. (NASDAQ:BEAT), around 3.41% of its 13F portfolio. DAFNA Capital Management is also relatively very bullish on the stock, designating 0.9 percent of its 13F equity portfolio to BEAT.
As aggregate interest increased, specific money managers were breaking ground themselves. Cannell Capital, managed by J. Carlo Cannell, assembled the largest position in BioTelemetry, Inc. (NASDAQ:BEAT). Cannell Capital had $9.3 million invested in the company at the end of the quarter. Gavin Saitowitz and Cisco J. del Valle’s Prelude Capital (previously Springbok Capital) also made a $1.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Mika Toikka’s AlphaCrest Capital Management, Cliff Asness’s AQR Capital Management, and Michael Gelband’s ExodusPoint Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as BioTelemetry, Inc. (NASDAQ:BEAT) but similarly valued. We will take a look at Rambus Inc. (NASDAQ:RMBS), Innospec Inc. (NASDAQ:IOSP), USANA Health Sciences, Inc. (NYSE:USNA), Baozun Inc (NASDAQ:BZUN), SeaWorld Entertainment Inc (NYSE:SEAS), Mueller Industries, Inc. (NYSE:MLI), and Viela Bio, Inc. (NASDAQ:VIE). This group of stocks’ market values are closest to BEAT’s market value.
|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 19.4 hedge funds with bullish positions and the average amount invested in these stocks was $235 million. That figure was $89 million in BEAT’s case. SeaWorld Entertainment Inc (NYSE:SEAS) is the most popular stock in this table. On the other hand Viela Bio, Inc. (NASDAQ:VIE) is the least popular one with only 5 bullish hedge fund positions. BioTelemetry, Inc. (NASDAQ:BEAT) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for BEAT is 49.5. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on BEAT as the stock returned 32.6% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.