Is KRMD A Good Stock To Buy Now?

With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was Repro Med Systems, Inc. (NASDAQ:KRMD).

Is KRMD a good stock to buy now? Repro Med Systems, Inc. (NASDAQ:KRMD) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 15 hedge funds’ portfolios at the end of September. Our calculations also showed that KRMD 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). At the end of this article we will also compare KRMD to other stocks including HEXO Corp. (NYSE:HEXO), Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE), and Capital City Bank Group, Inc. (NASDAQ:CCBG) to get a better sense of its popularity.

Video: Watch our video about the top 5 most popular hedge fund stocks.

Today there are several indicators stock traders have at their disposal to value publicly traded companies. A couple of the most innovative indicators are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the top picks of the best investment managers can trounce the S&P 500 by a solid amount (see the details here).

Donald Sussman Paloma Partners

Donald Sussman of Paloma Partners

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. Keeping this in mind we’re going to take a glance at the new hedge fund action regarding Repro Med Systems, Inc. (NASDAQ:KRMD).

Do Hedge Funds Think KRMD Is A Good Stock To Buy Now?

At the end of September, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in KRMD 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, Parkman Healthcare Partners held the most valuable stake in Repro Med Systems, Inc. (NASDAQ:KRMD), which was worth $4.6 million at the end of the third quarter. On the second spot was Pura Vida Investments which amassed $2.9 million worth of shares. Millennium Management, Renaissance Technologies, and Arrowstreet 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 Parkman Healthcare Partners allocated the biggest weight to Repro Med Systems, Inc. (NASDAQ:KRMD), around 1.21% of its 13F portfolio. Manatuck Hill Partners is also relatively very bullish on the stock, dishing out 0.46 percent of its 13F equity portfolio to KRMD.

Since Repro Med Systems, Inc. (NASDAQ:KRMD) has witnessed bearish sentiment from the smart money, we can see that there exists a select few money managers that elected to cut their entire stakes heading into Q4. Interestingly, Constantinos J. Christofilis’s Archon Capital Management said goodbye to the largest stake of the 750 funds watched by Insider Monkey, comprising an estimated $1.8 million in stock. Joseph Edelman’s fund, Perceptive Advisors, also sold off its stock, about $0.7 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Repro Med Systems, Inc. (NASDAQ:KRMD) but similarly valued. We will take a look at HEXO Corp. (NYSE:HEXO), Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE), Capital City Bank Group, Inc. (NASDAQ:CCBG), Qudian Inc. (NYSE:QD), Great Panther Mining Ltd (NYSE:GPL), Container Store Group Inc (NYSE:TCS), and Source Capital, Inc. (NYSE:SOR). This group of stocks’ market caps resemble KRMD’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
HEXO 4 374 -1
AGLE 22 147695 3
CCBG 6 6349 3
QD 6 8739 -2
GPL 5 4961 1
TCS 14 181766 5
SOR 2 31699 -2
Average 8.4 54512 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 8.4 hedge funds with bullish positions and the average amount invested in these stocks was $55 million. That figure was $16 million in KRMD’s case. Aeglea BioTherapeutics, Inc. (NASDAQ:AGLE) is the most popular stock in this table. On the other hand Source Capital, Inc. (NYSE:SOR) is the least popular one with only 2 bullish hedge fund positions. Repro Med Systems, Inc. (NASDAQ:KRMD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for KRMD is 67.5. 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. 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 30.7% in 2020 through December 14th and beat the market again by 15.8 percentage points. Unfortunately KRMD wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on KRMD were disappointed as the stock returned -22.7% since the end of September (through 12/14) 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.

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Disclosure: None. This article was originally published at Insider Monkey.