Hedge Funds Are Crazy About Cantel Medical Corp. (CMN): Endologix, Inc. (ELGX), Luminex Corporation (LMNX)

Cantel Medical Corp. (NYSE:CMN) was in 9 hedge funds’ portfolio at the end of December. CMN investors should pay attention to an increase in support from the world’s most elite money managers lately. There were 5 hedge funds in our database with CMN holdings at the end of the previous quarter.

In the eyes of most market participants, hedge funds are assumed to be worthless, old investment vehicles of years past. While there are more than 8000 funds in operation at present, we at Insider Monkey choose to focus on the aristocrats of this club, about 450 funds. It is estimated that this group oversees most of the smart money’s total capital, and by keeping an eye on their highest performing picks, we have figured out a few investment strategies that have historically beaten Mr. Market. Our small-cap hedge fund strategy beat the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 24 percentage points in 7 months (explore the details and some picks here).

Equally as key, optimistic insider trading activity is a second way to parse down the marketplace. Obviously, there are many reasons for a bullish insider to downsize shares of his or her company, but just one, very simple reason why they would initiate a purchase. Several empirical studies have demonstrated the impressive potential of this tactic if “monkeys” understand where to look (learn more here).

Keeping this in mind, it’s important to take a look at the key action encompassing Cantel Medical Corp. (NYSE:CMN).

What does the smart money think about Cantel Medical Corp. (NYSE:CMN)?

In preparation for this year, a total of 9 of the hedge funds we track were bullish in this stock, a change of 80% from one quarter earlier. With hedgies’ capital changing hands, there exists a few notable hedge fund managers who were upping their holdings significantly.

Of the funds we track, GAMCO Investors, managed by Mario Gabelli, holds the biggest position in Cantel Medical Corp. (NYSE:CMN). GAMCO Investors has a $8 million position in the stock, comprising 0.1% of its 13F portfolio. On GAMCO Investors’s heels is Royce & Associates, managed by Chuck Royce, which held a $2 million position; the fund has 0% of its 13F portfolio invested in the stock. Other hedgies with similar optimism include Cliff Asness’s AQR Capital Management, Mike Vranos’s Ellington and Jim Simons’s Renaissance Technologies.

With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Ellington, managed by Mike Vranos, assembled the largest position in Cantel Medical Corp. (NYSE:CMN). Ellington had 1 million invested in the company at the end of the quarter. Joel Greenblatt’s Gotham Asset Management also initiated a $0 million position during the quarter. The other funds with new positions in the stock are Steven Cohen’s SAC Capital Advisors, Ken Griffin’s Citadel Investment Group, and John Overdeck and David Siegel’s Two Sigma Advisors.

What do corporate executives and insiders think about Cantel Medical Corp. (NYSE:CMN)?

Insider trading activity, especially when it’s bullish, is best served when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time frame, Cantel Medical Corp. (NYSE:CMN) has experienced zero unique insiders buying, and 4 insider sales (see the details of insider trades here).

Let’s also review hedge fund and insider activity in other stocks similar to Cantel Medical Corp. (NYSE:CMN). These stocks are Endologix, Inc. (NASDAQ:ELGX), Luminex Corporation (NASDAQ:LMNX), Conceptus, Inc. (NASDAQ:CPTS), Tornier N.V. (NASDAQ:TRNX), and ICU Medical, Incorporated (NASDAQ:ICUI). This group of stocks are in the medical instruments & supplies industry and their market caps are closest to CMN’s market cap.