Where Do Hedge Funds Stand On INMODE LTD. (INMD)?

Hedge funds and large money managers usually invest with a focus on the long-term horizon and, therefore, short-lived dips or bumps on the charts usually don’t make them change their opinion towards a company. This time it may be different. The coronavirus pandemic destroyed the high correlations among major industries and asset classes. We are now in a stock pickers market where fundamentals of a stock have more effect on the price than the overall direction of the market. As a result we observe sudden and large changes in hedge fund positions depending on the news flow. Let’s take a look at the hedge fund sentiment towards INMODE LTD. (NASDAQ:INMD) to find out whether there were any major changes in hedge funds’ views.

Hedge fund interest in INMODE LTD. (NASDAQ:INMD) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that INMD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Owens & Minor, Inc. (NYSE:OMI), Intra-Cellular Therapies Inc (NASDAQ:ITCI), and SkyWest, Inc. (NASDAQ:SKYW) to gather more data points.

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Andrew Sandler of Sandler Capital Management

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

At the end of the first quarter, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in INMD over the last 23 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Renaissance Technologies was the largest shareholder of INMODE LTD. (NASDAQ:INMD), with a stake worth $35.2 million reported as of the end of March. Trailing Renaissance Technologies was Miura Global Management, which amassed a stake valued at $23.5 million. Two Sigma Advisors, GLG Partners, and Citadel Investment Group 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 Noked Capital allocated the biggest weight to INMODE LTD. (NASDAQ:INMD), around 4.97% of its 13F portfolio. Miura Global Management is also relatively very bullish on the stock, designating 4.2 percent of its 13F equity portfolio to INMD.

Due to the fact that INMODE LTD. (NASDAQ:INMD) has faced falling interest from hedge fund managers, logic holds that there were a few money managers who were dropping their positions entirely in the first quarter. At the top of the heap, Guy Shahar’s DSAM Partners sold off the biggest position of the 750 funds tracked by Insider Monkey, comprising an estimated $11.2 million in stock. Ira Unschuld’s fund, Brant Point Investment Management, also said goodbye to its stock, about $1.4 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks similar to INMODE LTD. (NASDAQ:INMD). These stocks are Owens & Minor, Inc. (NYSE:OMI), Intra-Cellular Therapies Inc (NASDAQ:ITCI), SkyWest, Inc. (NASDAQ:SKYW), Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT), Matador Resources Co (NYSE:MTDR), Clean Energy Fuels Corp (NASDAQ:CLNE), and Veoneer, Inc. (NYSE:VNE). This group of stocks’ market caps resemble INMD’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
OMI 16 272829 -4
ITCI 15 256287 -8
SKYW 17 69972 2
RCKT 22 567882 -11
MTDR 14 199389 -4
CLNE 15 64692 2
VNE 13 234000 2
Average 16 237864 -3

View table here if you experience formatting issues.

As you can see these stocks had an average of 16 hedge funds with bullish positions and the average amount invested in these stocks was $238 million. That figure was $214 million in INMD’s case. Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT) is the most popular stock in this table. On the other hand Veoneer, Inc. (NYSE:VNE) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks INMODE LTD. (NASDAQ:INMD) is more popular among hedge funds. Our overall hedge fund sentiment score for INMD is 85. 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 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 returned 23.8% in 2021 through July 16th but still managed to beat the market by 7.7 percentage points. Hedge funds were also right about betting on INMD as the stock returned 46.2% since the end of March (through 7/16) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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