Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of IntriCon Corporation (NASDAQ:IIN).
Hedge fund interest in IntriCon Corporation (NASDAQ:IIN) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that IIN 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). At the end of this article we will also compare IIN to other stocks including Palatin Technologies, Inc. (NYSE:PTN), Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS), and C&F Financial Corp (NASDAQ:CFFI) to get a better sense of its popularity.
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 10 most profitable companies in the world 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.Now let’s take a peek at the recent hedge fund action regarding IntriCon Corporation (NASDAQ:IIN).
Hedge fund activity in IntriCon Corporation (NASDAQ:IIN)
At Q3’s end, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. On the other hand, there were a total of 9 hedge funds with a bullish position in IIN a year ago. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
The largest stake in IntriCon Corporation (NASDAQ:IIN) was held by Royce & Associates, which reported holding $9.4 million worth of stock at the end of September. It was followed by GAMCO Investors with a $6.6 million position. The only other hedge fund that is bullish on the company was Renaissance Technologies.
We view hedge fund activity in the stock unfavorable, but in this case there was only a single hedge fund selling its entire position: Winton Capital Management. One hedge fund selling its entire position doesn’t always imply a bearish intent. Theoretically a hedge fund may decide to sell a promising position in order to invest the proceeds in a more promising idea. However, we don’t think this is the case in this case because only one of the 800+ hedge funds tracked by Insider Monkey identified as a viable investment and initiated a position in the stock (that fund was Renaissance Technologies).
Let’s now review hedge fund activity in other stocks similar to IntriCon Corporation (NASDAQ:IIN). These stocks are Palatin Technologies, Inc. (NYSE:PTN), Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS), C&F Financial Corp (NASDAQ:CFFI), Clipper Realty Inc. (NYSE:CLPR), Everspin Technologies, Inc. (NASDAQ:MRAM), Alaska Communications Systems Group Inc (NASDAQ:ALSK), and BankFinancial Corporation (NASDAQ:BFIN). This group of stocks’ market values are closest to IIN’s market value.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.9 hedge funds with bullish positions and the average amount invested in these stocks was $12 million. That figure was $16 million in IIN’s case. Pieris Pharmaceuticals, Inc. (NASDAQ:PIRS) is the most popular stock in this table. On the other hand C&F Financial Corp (NASDAQ:CFFI) is the least popular one with only 2 bullish hedge fund positions. IntriCon Corporation (NASDAQ:IIN) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IIN is 13.8. 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. 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 28.1% in 2020 through November 23rd and still beat the market by 15.4 percentage points. A small number of hedge funds were also right about betting on IIN as the stock returned 44% since the end of the third quarter (through 11/23) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.