The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors endured a torrid quarter, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Model N Inc (NYSE:MODN).
Model N Inc (NYSE:MODN) investors should pay attention to a decrease in activity from the world’s largest hedge funds of late. MODN was in 14 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with MODN positions at the end of the previous quarter. At the end of this article we will also compare MODN to other stocks, including Orexigen Therapeutics, Inc. (NASDAQ:OREX), Tandem Diabetes Care Inc (NASDAQ:TNDM), and CTI BioPharma Corp (NASDAQ:CTIC) to get a better sense of its popularity.
Follow Model N Inc. (NYSE:MODN)
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To the average investor, there are a large number of methods stock market investors can use to value their stock investments. Some of the most useful methods are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the elite hedge fund managers can outpace the market by a solid amount (see the details here).
Now, let’s go over the new action surrounding Model N Inc (NYSE:MODN).
What have hedge funds been doing with Model N Inc (NYSE:MODN)?
Heading into Q4, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a change of -7% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, RGM Capital, managed by Robert G. Moses, holds the largest position in Model N Inc (NYSE:MODN). RGM Capital has an $22.1 million position in the stock, comprising 2.9% of its 13F portfolio. The second largest stake is held by Redmile Group, led by Jeremy Green, holding an $14.4 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors with similar optimism include Paul Orlin and Alex Porter’s Amici Capital, George Soros’ Soros Fund Management and Jim Simons’s Renaissance Technologies.
Since Model N Inc (NYSE:MODN) has experienced falling interest from the smart money, it’s easy to see that there is a sect of money managers that slashed their full holdings by the end of the third quarter. It’s worth mentioning that Josh Goldberg’s G2 Investment Partners Management cut the largest investment of all the hedgies watched by Insider Monkey, comprising about $1 million in stock. Peter Muller’s fund, PDT Partners, also said goodbye to its stock, about $0.1 million worth.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Model N Inc (NYSE:MODN) but similarly valued. These stocks are Orexigen Therapeutics, Inc. (NASDAQ:OREX), Tandem Diabetes Care Inc (NASDAQ:TNDM), CTI BioPharma Corp (NASDAQ:CTIC), and Corenergy Infrastructure Trust Inc (NYSE:CORR). This group of stocks’ market valuations are similar to MODN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OREX | 19 | 48960 | -9 |
| TNDM | 8 | 25863 | -4 |
| CTIC | 8 | 17060 | -1 |
| CORR | 9 | 24685 | -1 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $29 million, below the $65 million figure in MODN’s case. Orexigen Therapeutics, Inc. (NASDAQ:OREX) is the most popular stock in this table. On the other hand Tandem Diabetes Care Inc (NASDAQ:TNDM) is the least popular one with only 8 bullish hedge fund positions. Model N Inc (NYSE:MODN) is not the most popular stock in this group, but hedge fund interest is still above average. This is a slightly positive signal, but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard OREX might be a better candidate to consider a long position.
