Hedge Funds Are Piling Into Merit Medical Systems, Inc. (MMSI)

In this article we will check out the progression of hedge fund sentiment towards Merit Medical Systems, Inc. (NASDAQ:MMSI) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Is Merit Medical Systems, Inc. (NASDAQ:MMSI) a buy right now? Prominent investors were taking an optimistic view. The number of bullish hedge fund bets inched up by 1 lately. Merit Medical Systems, Inc. (NASDAQ:MMSI) was in 23 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 22. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that MMSI isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings). There were 22 hedge funds in our database with MMSI positions at the end of the second quarter.

David E. Shaw of D.E. Shaw

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. With all of this in mind let’s take a gander at the new hedge fund action regarding Merit Medical Systems, Inc. (NASDAQ:MMSI).

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

At Q3’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 5% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards MMSI over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Merit Medical Systems, Inc. (NASDAQ:MMSI) was held by Starboard Value LP, which reported holding $254.3 million worth of stock at the end of September. It was followed by Polar Capital with a $49.4 million position. Other investors bullish on the company included D E Shaw, Fisher Asset Management, and 13D Management. In terms of the portfolio weights assigned to each position Starboard Value LP allocated the biggest weight to Merit Medical Systems, Inc. (NASDAQ:MMSI), around 4.65% of its 13F portfolio. 13D Management is also relatively very bullish on the stock, earmarking 3.63 percent of its 13F equity portfolio to MMSI.

As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Millennium Management, managed by Israel Englander, created the largest call position in Merit Medical Systems, Inc. (NASDAQ:MMSI). Millennium Management had $2.2 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $2 million investment in the stock during the quarter. The following funds were also among the new MMSI investors: Ken Griffin’s Citadel Investment Group, Jinghua Yan’s TwinBeech Capital, and Greg Eisner’s Engineers Gate Manager.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Merit Medical Systems, Inc. (NASDAQ:MMSI) but similarly valued. We will take a look at Schneider National, Inc. (NYSE:SNDR), ViaSat, Inc. (NASDAQ:VSAT), UniFirst Corp (NYSE:UNF), Atkore International Group Inc. (NYSE:ATKR), Hudson Pacific Properties Inc (NYSE:HPP), SailPoint Technologies Holdings, Inc. (NYSE:SAIL), and Black Hills Corporation (NYSE:BKH). This group of stocks’ market values match MMSI’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.7 hedge funds with bullish positions and the average amount invested in these stocks was $415 million. That figure was $407 million in MMSI’s case. Atkore International Group Inc. (NYSE:ATKR) is the most popular stock in this table. On the other hand Hudson Pacific Properties Inc (NYSE:HPP) is the least popular one with only 11 bullish hedge fund positions. Merit Medical Systems, Inc. (NASDAQ:MMSI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MMSI is 76. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 gained 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately MMSI wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MMSI were disappointed as the stock returned -10.5% since the end of September (through 12/9) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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

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