Is MiMedx Group Inc (MDXG) A Good Stock To Buy?

At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.

MiMedx Group Inc (NASDAQ:MDXG) investors should be aware of a decrease in support from the world’s most elite money managers of late. MDXG was in 17 hedge funds’ portfolios at the end of September. There were 22 hedge funds in our database with MDXG positions at the end of the previous quarter. At the end of this article we will also compare MDXG to other stocks including American Woodmark Corporation (NASDAQ:AMWD), Sunrun Inc (NASDAQ:RUN), and Schweitzer-Mauduit International, Inc. (NYSE:SWM) to get a better sense of its popularity.

Keeping this in mind, we’re going to take a gander at the key action surrounding MiMedx Group Inc (NASDAQ:MDXG).

How are hedge funds trading MiMedx Group Inc (NASDAQ:MDXG)?

At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -23% from the previous quarter. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Steve Cohen’s Point72 Asset Management has the largest position in MiMedx Group Inc (NASDAQ:MDXG), worth close to $7.9 million, accounting for 0.1% of its total 13F portfolio. The second largest stake is held by Robert B. Gillam of McKinley Capital Management, with a $7.1 million position; 0.3% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors with similar optimism comprise Leonard A. Potter’s Wildcat Capital Management, James Dondero’s Highland Capital Management and Andy Redleaf’s Whitebox Advisors.

Because MiMedx Group Inc (NASDAQ:MDXG) has witnessed declining sentiment from the aggregate hedge fund industry, it’s safe to say that there is a sect of money managers who sold off their full holdings heading into Q4. Intriguingly, Justin John Ferayorni’s Tamarack Capital Management dumped the biggest investment of all the hedgies monitored by Insider Monkey, totaling close to $15.1 million in stock, and James A. Silverman’s Opaleye Management was right behind this move, as the fund dropped about $7.2 million worth. These transactions are intriguing to say the least, as total hedge fund interest dropped by 5 funds heading into Q4.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as MiMedx Group Inc (NASDAQ:MDXG) but similarly valued. We will take a look at American Woodmark Corporation (NASDAQ:AMWD), Sunrun Inc (NASDAQ:RUN), Schweitzer-Mauduit International, Inc. (NYSE:SWM), and AAON, Inc. (NASDAQ:AAON). All of these stocks’ market caps are closest to MDXG’s market cap.

As you can see these stocks had an average of 12.75 hedge funds with bullish positions and the average amount invested in these stocks was $101 million. That figure was $24 million in MDXG’s case. American Woodmark Corporation (NASDAQ:AMWD) is the most popular stock in this table. On the other hand AAON, Inc. (NASDAQ:AAON) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks MiMedx Group Inc (NASDAQ:MDXG) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.