Is Merit Medical Systems, Inc. (MMSI) A Good Stock To Buy?

Since Merit Medical Systems, Inc. (NASDAQ:MMSI) has gone through declining sentiment from hedge fund managers, logic holds that there lies a certain “tier” of hedgies that elected to cut their entire stakes last quarter. Interestingly, Phill Gross and Robert Atchinson’s Adage Capital Management cut the biggest investment of all the investors monitored by Insider Monkey, comprising close to $5.8 million in stock, and Ira Unschuld’s Brant Point Investment Management was right behind this move, as the fund dumped about $1.6 million worth of shares.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Merit Medical Systems, Inc. (NASDAQ:MMSI) but similarly valued. These stocks are Dermira Inc (NASDAQ:DERM), Luminex Corporation (NASDAQ:LMNX), New Senior Investment Group Inc (NYSE:SNR), and Monmouth R.E. Inv. Corp. (NYSE:MNR). This group of stocks’ market caps are similar to MMSI’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
DERM 29 204585 5
LMNX 14 109857 -7
SNR 17 114119 2
MNR 9 45888 0

As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $119 million. That figure was $64 million in MMSI’s case. Dermira Inc (NASDAQ:DERM) is the most popular stock in this table. On the other hand Monmouth R.E. Inv. Corp. (NYSE:MNR) is the least popular one with only 9 bullish hedge fund positions. Merit Medical Systems, Inc. (NASDAQ:MMSI) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard DERM might be a better candidate to consider taking a long position in.

Disclosure: None