Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is ConforMIS, Inc. (NASDAQ:CFMS), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is ConforMIS, Inc. (NASDAQ:CFMS) a good stock to buy now? Investors who are in the know were becoming less hopeful. The number of long hedge fund bets shrunk by 3 lately. ConforMIS, Inc. (NASDAQ:CFMS) was in 7 hedge funds’ portfolios at the end of September. The all time high for this statistics is 13. Our calculations also showed that CFMS 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). There were 10 hedge funds in our database with CFMS positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Today there are many tools market participants can use to appraise their holdings. A couple of the best tools are hedge fund and insider trading moves. Our experts have shown that, historically, those who follow the best picks of the best money managers can outclass the broader indices by a solid amount (see the details here).
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 check out the fresh hedge fund action regarding ConforMIS, Inc. (NASDAQ:CFMS).
Hedge fund activity in ConforMIS, Inc. (NASDAQ:CFMS)
At the end of the third quarter, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of -30% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in CFMS over the last 21 quarters. 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, Armistice Capital held the most valuable stake in ConforMIS, Inc. (NASDAQ:CFMS), which was worth $6.3 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $4.4 million worth of shares. Archon Capital Management, Millennium Management, and Bourgeon Capital 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 Archon Capital Management allocated the biggest weight to ConforMIS, Inc. (NASDAQ:CFMS), around 0.65% of its 13F portfolio. Armistice Capital is also relatively very bullish on the stock, earmarking 0.23 percent of its 13F equity portfolio to CFMS.
Because ConforMIS, Inc. (NASDAQ:CFMS) has faced declining sentiment from hedge fund managers, we can see that there were a few hedge funds who sold off their full holdings in the third quarter. Intriguingly, Donald Sussman’s Paloma Partners said goodbye to the biggest investment of all the hedgies monitored by Insider Monkey, valued at an estimated $0.1 million in stock, and Cliff Asness’s AQR Capital Management was right behind this move, as the fund said goodbye to about $0 million worth. These transactions are interesting, as aggregate hedge fund interest was cut by 3 funds in the third quarter.
Let’s now take a look at hedge fund activity in other stocks similar to ConforMIS, Inc. (NASDAQ:CFMS). These stocks are EyePoint Pharmaceuticals, Inc. (NASDAQ:EYPT), Natural Health Trends Corp. (NASDAQ:NHTC), TETRA Technologies, Inc. (NYSE:TTI), Cortland Bancorp (NASDAQ:CLDB), HMN Financial, Inc. (NASDAQ:HMNF), Vince Holding Corp (NYSE:VNCE), and Network-1 Technologies Inc (NYSE:NTIP). This group of stocks’ market caps are closest to CFMS’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 4 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $15 million in CFMS’s case. TETRA Technologies, Inc. (NYSE:TTI) is the most popular stock in this table. On the other hand Cortland Bancorp (NASDAQ:CLDB) is the least popular one with only 2 bullish hedge fund positions. ConforMIS, Inc. (NASDAQ:CFMS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CFMS is 43.2. 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 positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 31.6% in 2020 through December 2nd and beat the market again by 16 percentage points. Unfortunately CFMS wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on CFMS were disappointed as the stock returned -22.6% since the end of September (through 12/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.