In this article we will take a look at whether hedge funds think Invacare Corporation (NYSE:IVC) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Invacare Corporation (NYSE:IVC) was in 17 hedge funds’ portfolios at the end of March. The all time high for this statistic is 21. IVC shareholders have witnessed an increase in hedge fund interest recently. There were 16 hedge funds in our database with IVC positions at the end of the fourth quarter. Our calculations also showed that IVC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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 115 percentage points since March 2017 (see the details here). 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, 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 take a glance at the fresh hedge fund action regarding Invacare Corporation (NYSE:IVC).
Do Hedge Funds Think IVC Is A Good Stock To Buy Now?
At the end of March, a total of 17 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 6% from the fourth quarter of 2020. The graph below displays the number of hedge funds with bullish position in IVC over the last 23 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists a select group of notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Endurant Capital Management, managed by Vishal Saluja and Pham Quang, holds the largest position in Invacare Corporation (NYSE:IVC). Endurant Capital Management has a $19.3 million position in the stock, comprising 5% of its 13F portfolio. The second most bullish fund manager is Renaissance Technologies, holding a $17.2 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining peers that hold long positions comprise Israel Englander’s Millennium Management, Efrem Kamen’s Pura Vida Investments and Vishal Saluja and Pham Quang’s Endurant Capital Management. In terms of the portfolio weights assigned to each position Endurant Capital Management allocated the biggest weight to Invacare Corporation (NYSE:IVC), around 5.03% of its 13F portfolio. Endurant Capital Management is also relatively very bullish on the stock, setting aside 2.32 percent of its 13F equity portfolio to IVC.
With a general bullishness amongst the heavyweights, key money managers have been driving this bullishness. Endurant Capital Management, managed by Vishal Saluja and Pham Quang, initiated the most outsized position in Invacare Corporation (NYSE:IVC). Endurant Capital Management had $19.3 million invested in the company at the end of the quarter. Vishal Saluja and Pham Quang’s Endurant Capital Management also initiated a $8.9 million position during the quarter. The other funds with new positions in the stock are Peter Schliemann’s Rutabaga Capital Management, Greg Eisner’s Engineers Gate Manager, and Gregory Fraser, Rudolph Kluiber, and Timothy Krochuk’s GRT Capital Partners.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Invacare Corporation (NYSE:IVC) but similarly valued. We will take a look at Biglari Holdings Inc (NYSE:BH), WAVE Life Sciences Ltd. (NASDAQ:WVE), Diana Shipping Inc. (NYSE:DSX), Provident Bancorp, Inc. (NASDAQ:PVBC), SuRo Capital Corp. (NASDAQ:SSSS), Hywin Holdings Ltd. (NASDAQ:HYW), and Great Panther Mining Ltd (NYSE:GPL). This group of stocks’ market values are similar to IVC’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BH | 6 | 19731 | -3 |
| WVE | 20 | 114407 | -3 |
| DSX | 13 | 37706 | 4 |
| PVBC | 5 | 4867 | -2 |
| SSSS | 12 | 31501 | 1 |
| HYW | 1 | 1960 | 1 |
| GPL | 7 | 7037 | -1 |
| Average | 9.1 | 31030 | -0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.1 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $93 million in IVC’s case. WAVE Life Sciences Ltd. (NASDAQ:WVE) is the most popular stock in this table. On the other hand Hywin Holdings Ltd. (NASDAQ:HYW) is the least popular one with only 1 bullish hedge fund positions. Invacare Corporation (NYSE:IVC) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for IVC is 72.4. 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 28.5% in 2021 through July 23rd and beat the market again by 10.1 percentage points. Unfortunately IVC wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on IVC were disappointed as the stock returned -6.5% 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 many of these stocks already outperformed the market since 2019.
Follow Invacare Holdings Corp (NYSE:IVCRQ)
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Disclosure: None. This article was originally published at Insider Monkey.
