At Insider Monkey, we pore over the filings of nearly 817 top investment firms every quarter, a process we have now completed for the latest reporting period. The data we’ve gathered as a result gives us access to a wealth of collective knowledge based on these firms’ portfolio holdings as of September 30. In this article, we will use that wealth of knowledge to determine whether or not Cryolife Inc (NYSE:CRY) makes for a good investment right now.
Is Cryolife Inc (NYSE:CRY) the right pick for your portfolio? Money managers were getting more optimistic. The number of bullish hedge fund positions went up by 1 recently. Cryolife Inc (NYSE:CRY) was in 12 hedge funds’ portfolios at the end of September. The all time high for this statistics is 15. Our calculations also showed that CRY 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 11 hedge funds in our database with CRY 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 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. Keeping this in mind we’re going to go over the key hedge fund action encompassing Cryolife Inc (NYSE:CRY).
Do Hedge Funds Think CRY Is A Good Stock To Buy Now?
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from the previous quarter. On the other hand, there were a total of 10 hedge funds with a bullish position in CRY a year ago. With the smart money’s capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
More specifically, Juniper Investment Company was the largest shareholder of Cryolife Inc (NYSE:CRY), with a stake worth $29.6 million reported as of the end of September. Trailing Juniper Investment Company was Royce & Associates, which amassed a stake valued at $6.6 million. Millennium Management, Citadel Investment Group, and Marshall Wace LLP 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 Juniper Investment Company allocated the biggest weight to Cryolife Inc (NYSE:CRY), around 31.42% of its 13F portfolio. Greenlight Capital is also relatively very bullish on the stock, designating 0.15 percent of its 13F equity portfolio to CRY.
Now, key hedge funds have jumped into Cryolife Inc (NYSE:CRY) headfirst. Citadel Investment Group, managed by Ken Griffin, initiated the most valuable position in Cryolife Inc (NYSE:CRY). Citadel Investment Group had $3.8 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $2.9 million position during the quarter. The following funds were also among the new CRY investors: Steve Cohen’s Point72 Asset Management, D. E. Shaw’s D E Shaw, and David Einhorn’s Greenlight Capital.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Cryolife Inc (NYSE:CRY) but similarly valued. These stocks are Matthews International Corp (NASDAQ:MATW), NV5 Global Inc (NASDAQ:NVEE), S & T Bancorp Inc (NASDAQ:STBA), Codexis, Inc. (NASDAQ:CDXS), Personalis, Inc. (NASDAQ:PSNL), Stratasys, Ltd. (NASDAQ:SSYS), and Echo Global Logistics, Inc. (NASDAQ:ECHO). This group of stocks’ market values match CRY’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 12.3 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $58 million in CRY’s case. Matthews International Corp (NASDAQ:MATW) is the most popular stock in this table. On the other hand S & T Bancorp Inc (NASDAQ:STBA) is the least popular one with only 5 bullish hedge fund positions. Cryolife Inc (NYSE:CRY) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CRY is 56.9. 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. 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 still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on CRY as the stock returned 21.3% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.