Were Hedge Funds Are Selling Integer Holdings Corporation (ITGR)?

Out of thousands of stocks that are currently traded on the market, it is difficult to identify those that will really generate strong returns. Hedge funds and institutional investors spend millions of dollars on analysts with MBAs and PhDs, who are industry experts and well connected to other industry and media insiders on top of that. Individual investors can piggyback the hedge funds employing these talents and can benefit from their vast resources and knowledge in that way. We analyze quarterly 13F filings of nearly 900 hedge funds and, by looking at the smart money sentiment that surrounds a stock, we can determine whether it has the potential to beat the market over the long-term. Therefore, let’s take a closer look at what smart money thinks about Integer Holdings Corporation (NYSE:ITGR).

Is Integer Holdings Corporation (NYSE:ITGR) the right pick for your portfolio? Money managers were cutting their exposure. The number of bullish hedge fund positions shrunk by 8 recently. Integer Holdings Corporation (NYSE:ITGR) was in 16 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 29. Our calculations also showed that ITGR isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 24 hedge funds in our database with ITGR positions at the end of the fourth quarter.

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 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 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, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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. Keeping this in mind we’re going to review the recent hedge fund action surrounding Integer Holdings Corporation (NYSE:ITGR).

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

At the end of the first quarter, a total of 16 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -33% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ITGR over the last 23 quarters. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).

More specifically, Hawk Ridge Management was the largest shareholder of Integer Holdings Corporation (NYSE:ITGR), with a stake worth $70.9 million reported as of the end of March. Trailing Hawk Ridge Management was Fisher Asset Management, which amassed a stake valued at $59.2 million. Diamond Hill Capital, BeaconLight Capital, and Arrowstreet Capital 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 Hawk Ridge Management allocated the biggest weight to Integer Holdings Corporation (NYSE:ITGR), around 4.86% of its 13F portfolio. Tamarack Capital Management is also relatively very bullish on the stock, dishing out 2.45 percent of its 13F equity portfolio to ITGR.

Seeing as Integer Holdings Corporation (NYSE:ITGR) has witnessed falling interest from the smart money, it’s safe to say that there was a specific group of fund managers who were dropping their entire stakes last quarter. At the top of the heap, Michael Castor’s Sio Capital dumped the biggest investment of the 750 funds tracked by Insider Monkey, comprising about $3.8 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also dropped its stock, about $1.9 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 8 funds last quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Integer Holdings Corporation (NYSE:ITGR) but similarly valued. We will take a look at CommVault Systems, Inc. (NASDAQ:CVLT), Atlantic Union Bankshares Corporation (NASDAQ:AUB), John Wiley & Sons Inc (NYSE:JW), ExlService Holdings, Inc. (NASDAQ:EXLS), PureCycle Technologies, Inc. (NASDAQ:PCT), American Equity Investment Life Holding Company (NYSE:AEL), and Tower Semiconductor Ltd. (NASDAQ:TSEM). All of these stocks’ market caps are closest to ITGR’s market cap.

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As you can see these stocks had an average of 18.3 hedge funds with bullish positions and the average amount invested in these stocks was $307 million. That figure was $217 million in ITGR’s case. American Equity Investment Life Holding Company (NYSE:AEL) is the most popular stock in this table. On the other hand Atlantic Union Bankshares Corporation (NASDAQ:AUB) is the least popular one with only 11 bullish hedge fund positions. Integer Holdings Corporation (NYSE:ITGR) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ITGR is 32.8. 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 negative signal and 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 28.5% in 2021 through July 23rd and surpassed the market again by 10.1 percentage points. Unfortunately ITGR wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ITGR investors were disappointed as the stock returned -0.2% since the end of March (through 7/23) 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 most of these stocks already outperformed the market in 2021.

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