How do we determine whether CorMedix Inc. (NYSE:CRMD) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
CorMedix Inc. (NYSE:CRMD) has experienced an increase in enthusiasm from smart money of late. Our calculations also showed that CRMD isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
According to most shareholders, hedge funds are seen as underperforming, outdated investment tools of the past. While there are more than 8000 funds in operation at the moment, Our experts look at the moguls of this club, around 750 funds. These money managers direct the lion’s share of the smart money’s total capital, and by watching their finest investments, Insider Monkey has brought to light several investment strategies that have historically surpassed the market. Insider Monkey’s flagship short hedge fund strategy exceeded the S&P 500 short ETFs by around 20 percentage points per annum since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Paul Singer of Elliott Management
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Now we’re going to take a look at the key hedge fund action regarding CorMedix Inc. (NYSE:CRMD).
How are hedge funds trading CorMedix Inc. (NYSE:CRMD)?
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 100% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards CRMD over the last 17 quarters. With the smart money’s sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
More specifically, Elliott Management was the largest shareholder of CorMedix Inc. (NYSE:CRMD), with a stake worth $5.3 million reported as of the end of September. Trailing Elliott Management was Sabby Capital, which amassed a stake valued at $1.6 million. Millennium Management, AQR Capital Management, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Sabby Capital allocated the biggest weight to CorMedix Inc. (NYSE:CRMD), around 0.86% of its 13F portfolio. Elliott Management is also relatively very bullish on the stock, earmarking 0.04 percent of its 13F equity portfolio to CRMD.
As one would reasonably expect, some big names were leading the bulls’ herd. Sabby Capital, managed by Hal Mintz, initiated the most outsized position in CorMedix Inc. (NYSE:CRMD). Sabby Capital had $1.6 million invested in the company at the end of the quarter. Cliff Asness’s AQR Capital Management also made a $0.1 million investment in the stock during the quarter. The other funds with brand new CRMD positions are Ken Griffin’s Citadel Investment Group and Paul Marshall and Ian Wace’s Marshall Wace.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as CorMedix Inc. (NYSE:CRMD) but similarly valued. We will take a look at Affimed NV (NASDAQ:AFMD), Exagen Inc. (NASDAQ:XGN), China Distance Education Hldgs Ltd (NYSE:DL), and Sol-Gel Technologies Ltd. (NASDAQ:SLGL). This group of stocks’ market values are similar to CRMD’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AFMD | 11 | 19629 | 1 |
| XGN | 6 | 13870 | 6 |
| DL | 1 | 1852 | -1 |
| SLGL | 3 | 10404 | 0 |
| Average | 5.25 | 11439 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 5.25 hedge funds with bullish positions and the average amount invested in these stocks was $11 million. That figure was $7 million in CRMD’s case. Affimed NV (NASDAQ:AFMD) is the most popular stock in this table. On the other hand China Distance Education Hldgs Ltd (NYSE:DL) is the least popular one with only 1 bullish hedge fund positions. CorMedix Inc. (NYSE:CRMD) is not the most popular stock in this group but hedge fund interest is still above average. 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately CRMD wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on CRMD were disappointed as the stock returned -3.9% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.