Hedge Funds Have Never Been This Bullish On INMODE LTD. (INMD)

Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is INMODE LTD. (NASDAQ:INMD), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

INMODE LTD. (NASDAQ:INMD) was in 29 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic was previously 26. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. INMD has experienced an increase in hedge fund interest in recent months. There were 26 hedge funds in our database with INMD holdings at the end of June. Our calculations also showed that INMD isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

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 we’re going to review the latest hedge fund action encompassing INMODE LTD. (NASDAQ:INMD).

Noam Gottesman of GLG Partners

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

At the end of the third quarter, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of 12% from the second quarter of 2021. On the other hand, there were a total of 16 hedge funds with a bullish position in INMD a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

The largest stake in INMODE LTD. (NASDAQ:INMD) was held by Renaissance Technologies, which reported holding $168 million worth of stock at the end of September. It was followed by Two Sigma Advisors with a $108.6 million position. Other investors bullish on the company included Citadel Investment Group, GLG Partners, and Marshall Wace LLP. In terms of the portfolio weights assigned to each position Noked Capital allocated the biggest weight to INMODE LTD. (NASDAQ:INMD), around 5.22% of its 13F portfolio. Miura Global Management is also relatively very bullish on the stock, earmarking 2.09 percent of its 13F equity portfolio to INMD.

As one would reasonably expect, specific money managers have jumped into INMODE LTD. (NASDAQ:INMD) headfirst. D E Shaw, managed by D. E. Shaw, assembled the largest position in INMODE LTD. (NASDAQ:INMD). D E Shaw had $13.9 million invested in the company at the end of the quarter. Brian Bares’s Bares Capital Management also initiated a $8.2 million position during the quarter. The following funds were also among the new INMD investors: Charles Montanaro’s Montanaro Asset Management, D. E. Shaw’s D E Shaw, and Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as INMODE LTD. (NASDAQ:INMD) but similarly valued. These stocks are Fox Factory Holding Corp (NASDAQ:FOXF), Inovalon Holdings Inc (NASDAQ:INOV), Joby Aviation Inc. (NYSE:JOBY), Lumentum Holdings Inc (NASDAQ:LITE), Primerica, Inc. (NYSE:PRI), Allegro MicroSystems, Inc. (NASDAQ:ALGM), and Chesapeake Energy Corporation (NASDAQ:CHK). This group of stocks’ market caps match INMD’s market cap.

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As you can see these stocks had an average of 24.4 hedge funds with bullish positions and the average amount invested in these stocks was $549 million. That figure was $524 million in INMD’s case. Chesapeake Energy Corporation (NASDAQ:CHK) is the most popular stock in this table. On the other hand Primerica, Inc. (NYSE:PRI) is the least popular one with only 14 bullish hedge fund positions. INMODE LTD. (NASDAQ:INMD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for INMD is 63. 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately INMD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on INMD were disappointed as the stock returned -4.7% since the end of September (through 11/30) 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.