Should I Avoid Repro Med Systems, Inc. (KRMD)?

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 873 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of June 30th, 2021. What do these smart investors think about Repro Med Systems, Inc. (NASDAQ:KRMD)?

Is Repro Med Systems, Inc. (NASDAQ:KRMD) the right investment to pursue these days? The best stock pickers were getting less optimistic. The number of long hedge fund bets retreated by 1 in recent months. Repro Med Systems, Inc. (NASDAQ:KRMD) was in 10 hedge funds’ portfolios at the end of June. The all time high for this statistic is 15. Our calculations also showed that KRMD isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind let’s take a glance at the recent hedge fund action surrounding Repro Med Systems, Inc. (NASDAQ:KRMD).

Do Hedge Funds Think KRMD Is A Good Stock To Buy Now?

At second quarter’s end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards KRMD over the last 24 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).

Among these funds, Roubaix Capital held the most valuable stake in Repro Med Systems, Inc. (NASDAQ:KRMD), which was worth $7.1 million at the end of the second quarter. On the second spot was Archon Capital Management which amassed $3.1 million worth of shares. Millennium Management, Parkman Healthcare Partners, and Royce & Associates 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 Roubaix Capital allocated the biggest weight to Repro Med Systems, Inc. (NASDAQ:KRMD), around 4.44% of its 13F portfolio. Archon Capital Management is also relatively very bullish on the stock, setting aside 0.35 percent of its 13F equity portfolio to KRMD.

Due to the fact that Repro Med Systems, Inc. (NASDAQ:KRMD) has experienced falling interest from the entirety of the hedge funds we track, we can see that there were a few hedge funds that slashed their entire stakes last quarter. Interestingly, Renaissance Technologies dropped the biggest investment of the “upper crust” of funds tracked by Insider Monkey, totaling close to $0.5 million in stock, and Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors was right behind this move, as the fund sold off about $0.3 million worth. These moves are important to note, as total hedge fund interest dropped by 1 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Repro Med Systems, Inc. (NASDAQ:KRMD). We will take a look at Delta Apparel, Inc. (NYSE:DLA), Waitr Holdings Inc. (NASDAQ:WTRH), ADMA Biologics Inc (NASDAQ:ADMA), Summit Midstream Partners LP (NYSE:SMLP), International Tower Hill Mines Ltd (NYSE:THM), Pacific Mercantile Bancorp (NASDAQ:PMBC), and Aqua Metals, Inc. (NASDAQ:AQMS). This group of stocks’ market valuations are similar to KRMD’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 6.7 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $14 million in KRMD’s case. Waitr Holdings Inc. (NASDAQ:WTRH) is the most popular stock in this table. On the other hand Summit Midstream Partners LP (NYSE:SMLP) is the least popular one with only 2 bullish hedge fund positions. Repro Med Systems, Inc. (NASDAQ:KRMD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for KRMD is 57.3. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 25.7% in 2021 through September 27th and beat the market again by 6.2 percentage points. Unfortunately KRMD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on KRMD were disappointed as the stock returned -36.9% since the end of June (through 9/27) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.

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