A market correction in the fourth quarter, spurred by a number of global macroeconomic concerns and rising interest rates ended up having a negative impact on the markets and many hedge funds as a result. The stocks of smaller companies were especially hard hit during this time as investors fled to investments seen as being safer. This is evident in the fact that the Russell 2000 ETF underperformed the S&P 500 ETF by 4 percentage points during the first half of the fourth quarter. We also received indications that hedge funds were trimming their positions amid the market volatility and uncertainty, and given their greater inclination towards smaller cap stocks than other investors, it follows that a stronger sell-off occurred in those stocks. Let’s study the hedge fund sentiment to see how those concerns affected their ownership of CONMED Corporation (NASDAQ:CNMD) during the quarter.
Is CONMED Corporation (NASDAQ:CNMD) an attractive investment right now? The best stock pickers are in an optimistic mood. The number of bullish hedge fund positions advanced by 3 in recent months. Our calculations also showed that cnmd isn’t among the 30 most popular stocks among hedge funds.
In the eyes of most stock holders, hedge funds are seen as slow, old investment tools of yesteryear. While there are greater than 8,000 funds in operation at present, Our researchers look at the top tier of this club, around 700 funds. Most estimates calculate that this group of people preside over the majority of the hedge fund industry’s total asset base, and by following their first-class picks, Insider Monkey has formulated many investment strategies that have historically exceeded the S&P 500 index. Insider Monkey’s flagship hedge fund strategy defeated the S&P 500 index by 6 percentage points a year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
We’re going to take a look at the key hedge fund action regarding CONMED Corporation (NASDAQ:CNMD).
What have hedge funds been doing with CONMED Corporation (NASDAQ:CNMD)?
At Q3’s end, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 17% from the second quarter of 2018. On the other hand, there were a total of 17 hedge funds with a bullish position in CNMD at the beginning of this year. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
The largest stake in CONMED Corporation (NASDAQ:CNMD) was held by Scopia Capital, which reported holding $95.4 million worth of stock at the end of September. It was followed by Fisher Asset Management with a $44.7 million position. Other investors bullish on the company included GLG Partners, Arrowstreet Capital, and Citadel Investment Group.
As aggregate interest increased, specific money managers have been driving this bullishness. Renaissance Technologies, managed by Jim Simons, established the most outsized position in CONMED Corporation (NASDAQ:CNMD). Renaissance Technologies had $2.8 million invested in the company at the end of the quarter. Brandon Haley’s Holocene Advisors also initiated a $0.6 million position during the quarter. The following funds were also among the new CNMD investors: D. E. Shaw’s D E Shaw, D. E. Shaw’s D E Shaw, and Ken Griffin’s Citadel Investment Group.
Let’s go over hedge fund activity in other stocks similar to CONMED Corporation (NASDAQ:CNMD). These stocks are Evolent Health Inc (NYSE:EVH), Finisar Corporation (NASDAQ:FNSR), First Merchants Corporation (NASDAQ:FRME), and TowneBank (NASDAQ:TOWN). This group of stocks’ market valuations are closest to CNMD’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EVH | 13 | 138711 | -2 |
| FNSR | 13 | 119514 | 2 |
| FRME | 13 | 152575 | 0 |
| TOWN | 9 | 44046 | -1 |
| Average | 12 | 113712 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $114 million. That figure was $229 million in CNMD’s case. Evolent Health Inc (NYSE:EVH) is the most popular stock in this table. On the other hand TowneBank (NASDAQ:TOWN) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks CONMED Corporation (NASDAQ:CNMD) 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. This article was originally published at Insider Monkey.
