The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. In this article we are going to take a look at smart money sentiment towards Motus GI Holdings, Inc. (NASDAQ:MOTS).
Is MOTS a good stock to buy now? Prominent investors were becoming hopeful. The number of long hedge fund positions improved by 1 in recent months. Motus GI Holdings, Inc. (NASDAQ:MOTS) was in 8 hedge funds’ portfolios at the end of September. The all time high for this statistics is 10. Our calculations also showed that MOTS 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). There were 7 hedge funds in our database with MOTS positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
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 5 best cheap stocks to buy according to Ray Dalio to identify stocks with upside potential. 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. With all of this in mind we’re going to analyze the recent hedge fund action encompassing Motus GI Holdings, Inc. (NASDAQ:MOTS).
What does smart money think about Motus GI Holdings, Inc. (NASDAQ:MOTS)?
At third quarter’s end, a total of 8 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 14% from the second quarter of 2020. On the other hand, there were a total of 10 hedge funds with a bullish position in MOTS a year ago. With hedge funds’ capital changing hands, there exists a few noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
More specifically, Perceptive Advisors was the largest shareholder of Motus GI Holdings, Inc. (NASDAQ:MOTS), with a stake worth $4 million reported as of the end of September. Trailing Perceptive Advisors was Armistice Capital, which amassed a stake valued at $2.8 million. Nantahala Capital Management, Alyeska Investment Group, and Hudson Bay Capital Management 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 Armistice Capital allocated the biggest weight to Motus GI Holdings, Inc. (NASDAQ:MOTS), around 0.1% of its 13F portfolio. Perceptive Advisors is also relatively very bullish on the stock, setting aside 0.06 percent of its 13F equity portfolio to MOTS.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Armistice Capital, managed by Steven Boyd, created the most outsized position in Motus GI Holdings, Inc. (NASDAQ:MOTS). Armistice Capital had $2.8 million invested in the company at the end of the quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Motus GI Holdings, Inc. (NASDAQ:MOTS) but similarly valued. These stocks are GigaMedia Limited (NASDAQ:GIGM), CBL & Associates Properties, Inc. (NYSE:CBL), Fujian Blue Hat Interactive Entertainment Technology (NASDAQ:BHAT), Millendo Therapeutics, Inc. (NASDAQ:MLND), BBQ Holdings, Inc. (NASDAQ:BBQ), Volt Information Sciences, Inc. (NYSE:VOLT), and Willamette Valley Vineyards, Inc. (NASDAQ:WVVI). This group of stocks’ market valuations are similar to MOTS’s market valuation.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.1 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $8 million in MOTS’s case. Millendo Therapeutics, Inc. (NASDAQ:MLND) is the most popular stock in this table. On the other hand GigaMedia Limited (NASDAQ:GIGM) is the least popular one with only 1 bullish hedge fund positions. Motus GI Holdings, Inc. (NASDAQ:MOTS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MOTS is 73.8. 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 31.6% in 2020 through December 2nd and beat the market again by 16 percentage points. Unfortunately MOTS wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on MOTS were disappointed as the stock returned -3.8% since the end of September (through 12/2) 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.
Disclosure: None. This article was originally published at Insider Monkey.