Hedge Funds Are Crazy About BioTelemetry, Inc. (BEAT)

We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards BioTelemetry, Inc. (NASDAQ:BEAT), and what that likely means for the prospects of the company and its stock.

Is BioTelemetry, Inc. (NASDAQ:BEAT) undervalued? The smart money is actually becoming more confident. The number of long hedge fund investments strengthened by 1 lately. There were 19 hedge funds in our database with BEAT positions at the end of the third quarter. At the end of this article we will also compare BEAT to other stocks including Global Indemnity plc (NASDAQ:GBLI), Accuray Incorporated (NASDAQ:ARAY), and The First of Long Island Corporation (NASDAQ:FLIC) to get a better sense of its popularity.

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How are hedge funds trading Cardionet Inc (NASDAQ:BEAT)?

At the end of the third quarter, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a rise of 6% from one quarter earlier. By comparison, 17 hedge funds held shares or bullish call options in BEAT heading into this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Of the funds tracked by Insider Monkey, Jim Simons’ Renaissance Technologies has the number one position in BioTelemetry, Inc. (NASDAQ:BEAT), worth close to $19.1 million. On Renaissance Technologies’ heels is J. Carlo Cannell of Cannell Capital, with an $18.2 million position; the fund has 7.2% of its 13F portfolio invested in the stock. Other peers with similar optimism consist of Chuck Royce’s Royce & Associates, Robert B. Gillam’s McKinley Capital Management and Israel Englander’s Millennium Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Now, key money managers have jumped into BioTelemetry, Inc. (NASDAQ:BEAT) headfirst. Warren Lammert of Granite Point Capital established the biggest position in BioTelemetry, Inc. (NASDAQ:BEAT). Granite Point Capital had $0.9 million invested in the company at the end of the quarter. D. E. Shaw’s D E Shaw also initiated a $0.6 million position during the quarter. The other funds with new positions in the stock are Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Matthew Tewksbury’s Stevens Capital Management, and Ken Griffin’s Citadel Investment Group.

Let’s go over hedge fund activity in other stocks similar to BioTelemetry, Inc. (NASDAQ:BEAT). These stocks are Global Indemnity plc (NASDAQ:GBLI), Accuray Incorporated (NASDAQ:ARAY), The First of Long Island Corporation (NASDAQ:FLIC), and Pzena Investment Management, Inc. (NYSE:PZN). This group of stocks’ market valuations resemble BEAT’s market valuation.

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $52 million. That figure was $83 million in BEAT’s case. Accuray Incorporated (NASDAQ:ARAY) is the most popular stock in this table. On the other hand Global Indemnity plc (NASDAQ:GBLI) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks BioTelemetry, Inc. (NASDAQ:BEAT) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.

Disclosure: None