The 700+ hedge funds and money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the third quarter, which unveil their equity positions as of September 30. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund positions. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Merit Medical Systems, Inc. (NASDAQ:MMSI) .
Merit Medical Systems, Inc. (NASDAQ:MMSI) was in 16 hedge funds’ portfolios at the end of the third quarter of 2016. MMSI shareholders have witnessed a decrease in hedge fund interest of late. There were 18 hedge funds in our database with MMSI holdings at the end of the previous quarter. At the end of this article we will also compare MMSI to other stocks including Dermira Inc (NASDAQ:DERM), Luminex Corporation (NASDAQ:LMNX), and New Senior Investment Group Inc (NYSE:SNR) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
With all of this in mind, we’re going to go over the recent action surrounding Merit Medical Systems, Inc. (NASDAQ:MMSI).
How are hedge funds trading Merit Medical Systems, Inc. (NASDAQ:MMSI)?
Heading into the fourth quarter of 2016, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a decline of 11% from one quarter earlier. On the other hand, there were a total of 18 hedge funds with a bullish position in MMSI at the beginning of this year. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Royce & Associates, led by Chuck Royce, holds the most valuable position in Merit Medical Systems, Inc. (NASDAQ:MMSI). Royce & Associates has a $15.2 million position in the stock. The second most bullish fund manager is Ken Grossman and Glen Schneider of SG Capital Management, with a $9.5 million position; 2.7% of its 13F portfolio is allocated to the company. Remaining members of the smart money that hold long positions contain Jim Simons’ Renaissance Technologies, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and D. E. Shaw’s D E Shaw. We should note that SG Capital Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
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|
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.