After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards Viemed Healthcare, Inc. (NASDAQ:VMD).
Is VMD a good stock to buy now? Viemed Healthcare, Inc. (NASDAQ:VMD) was in 14 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 8. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. VMD investors should pay attention to an increase in hedge fund sentiment in recent months. There were 6 hedge funds in our database with VMD holdings at the end of June. Our calculations also showed that VMD 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).
Video: Watch our video about the top 5 most popular hedge fund stocks.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
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 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 let’s take a gander at the fresh hedge fund action surrounding Viemed Healthcare, Inc. (NASDAQ:VMD).
Do Hedge Funds Think VMD Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 14 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 133% from the previous quarter. On the other hand, there were a total of 4 hedge funds with a bullish position in VMD a year ago. With hedgies’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their holdings meaningfully (or already accumulated large positions).
The largest stake in Viemed Healthcare, Inc. (NASDAQ:VMD) was held by Nantahala Capital Management, which reported holding $13 million worth of stock at the end of September. It was followed by Cove Street Capital with a $4.8 million position. Other investors bullish on the company included Royce & Associates, Two Sigma Advisors, and Millennium Management. In terms of the portfolio weights assigned to each position Cove Street Capital allocated the biggest weight to Viemed Healthcare, Inc. (NASDAQ:VMD), around 0.91% of its 13F portfolio. Zebra Capital Management is also relatively very bullish on the stock, designating 0.64 percent of its 13F equity portfolio to VMD.
With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Millennium Management, managed by Israel Englander, created the most valuable position in Viemed Healthcare, Inc. (NASDAQ:VMD). Millennium Management had $0.6 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also made a $0.4 million investment in the stock during the quarter. The other funds with brand new VMD positions are Roger Ibbotson’s Zebra Capital Management, Paul Marshall and Ian Wace’s Marshall Wace LLP, and Ken Griffin’s Citadel Investment Group.
Let’s go over hedge fund activity in other stocks similar to Viemed Healthcare, Inc. (NASDAQ:VMD). We will take a look at Caesarstone Ltd (NASDAQ:CSTE), Revlon Inc (NYSE:REV), LendingClub Corp (NYSE:LC), The Hackett Group, Inc. (NASDAQ:HCKT), Alerus Financial Corporation (NASDAQ:ALRS), Casa Systems, Inc. (NASDAQ:CASA), and One Liberty Properties, Inc. (NYSE:OLP). All of these stocks’ market caps are closest to VMD’s market cap.
|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 12.1 hedge funds with bullish positions and the average amount invested in these stocks was $56 million. That figure was $23 million in VMD’s case. Revlon Inc (NYSE:REV) is the most popular stock in this table. On the other hand Alerus Financial Corporation (NASDAQ:ALRS) is the least popular one with only 1 bullish hedge fund positions. Viemed Healthcare, Inc. (NASDAQ:VMD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VMD is 61. 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 32.9% in 2020 through December 8th and beat the market again by 16.2 percentage points. Unfortunately VMD wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on VMD were disappointed as the stock returned 6.6% since the end of September (through 12/8) 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.