How do you pick the next stock to invest in? One way would be to spend days of research browsing through thousands of publicly traded companies. However, an easier way is to look at the stocks that smart money investors are collectively bullish on. Hedge funds and other institutional investors usually invest large amounts of capital and have to conduct due diligence while choosing their next pick. They don’t always get it right, but, on average, their stock picks historically generated strong returns after adjusting for known risk factors. With this in mind, let’s take a look at the recent hedge fund activity surrounding Motus GI Holdings, Inc. (NASDAQ:MOTS).
Is Motus GI Holdings, Inc. (NASDAQ:MOTS) worth your attention right now? The smart money is becoming hopeful. The number of long hedge fund bets went up by 1 in recent months. Our calculations also showed that MOTS 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.
If you’d ask most market participants, hedge funds are viewed as slow, outdated investment vehicles of yesteryear. While there are more than 8000 funds trading at the moment, We choose to focus on the crème de la crème of this club, approximately 750 funds. These money managers shepherd the majority of the smart money’s total capital, and by tracking their unrivaled picks, Insider Monkey has identified several investment strategies that have historically surpassed the broader indices. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points annually 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 .
Wall Street Bull
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 analyze the key hedge fund action regarding Motus GI Holdings, Inc. (NASDAQ:MOTS).
Hedge fund activity in Motus GI Holdings, Inc. (NASDAQ:MOTS)
Heading into the fourth quarter of 2019, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards MOTS over the last 17 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes substantially (or already accumulated large positions).
The largest stake in Motus GI Holdings, Inc. (NASDAQ:MOTS) was held by Perceptive Advisors, which reported holding $8.3 million worth of stock at the end of September. It was followed by Alyeska Investment Group with a $1.2 million position. Other investors bullish on the company included Nantahala Capital Management, Diametric Capital, and Granite Point Capital. In terms of the portfolio weights assigned to each position Diametric Capital allocated the biggest weight to Motus GI Holdings, Inc. (NASDAQ:MOTS), around 0.61% of its 13F portfolio. Trellus Management Company is also relatively very bullish on the stock, setting aside 0.41 percent of its 13F equity portfolio to MOTS.
With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Millennium Management, managed by Israel Englander, created the biggest position in Motus GI Holdings, Inc. (NASDAQ:MOTS). Millennium Management had $0.3 million invested in the company at the end of the quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Motus GI Holdings, Inc. (NASDAQ:MOTS) but similarly valued. These stocks are First Seacoast Bancorp (NASDAQ:FSEA), North European Oil Royalty Trust (NYSE:NRT), CSP Inc. (NASDAQ:CSPI), and Canterbury Park Holding Corporation (NASDAQ:CPHC). All of these stocks’ market caps are closest to MOTS’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FSEA | 3 | 2481 | 3 |
| NRT | 1 | 1412 | -1 |
| CSPI | 1 | 3419 | 0 |
| CPHC | 1 | 5351 | 0 |
| Average | 1.5 | 3166 | 0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 1.5 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $14 million in MOTS’s case. First Seacoast Bancorp (NASDAQ:FSEA) is the most popular stock in this table. On the other hand North European Oil Royalty Trust (NYSE:NRT) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Motus GI Holdings, Inc. (NASDAQ:MOTS) is more popular among hedge funds. 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 MOTS wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on MOTS were disappointed as the stock returned -5.2% during the first two months of the fourth quarter 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 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
