Here is What Hedge Funds Think About BioTelemetry, Inc. (BEAT)

Investing in small cap stocks has historically been a way to outperform the market, as small cap companies typically grow faster on average than the blue chips. That outperformance comes with a price, however, as there are occasional periods of higher volatility. The time period between June 25 and the end of October was one of those periods, as the Russell 2000 ETF (IWM) has underperformed the larger S&P 500 ETF (SPY) by more than 14 percentage points. Given that the funds we track tend to have a disproportionate amount of their portfolios in smaller cap stocks, they have seen some volatility in their portfolios too. Actually their moves are potentially one of the factors that contributed to this volatility. In this article, we use our extensive database of hedge fund holdings to find out what the smart money thinks of BioTelemetry, Inc. (NASDAQ:BEAT).

BioTelemetry, Inc. (NASDAQ:BEAT) has experienced an increase in hedge fund interest lately. BEAT was in 23 hedge funds’ portfolios at the end of September. There were 20 hedge funds in our database with BEAT holdings at the end of the previous quarter. At the end of this article we will also compare BEAT to other stocks, including First Community Bancshares Inc (NASDAQ:FCBC), Aegean Marine Petroleum Network Inc. (NYSE:ANW), and Arbutus Biopharma Corp (NASDAQ:ABUS) to get a better sense of its popularity.

According to most market participants, hedge funds are viewed as underperforming, outdated financial tools of years past. While there are over 8000 funds with their doors open at the moment, We hone in on the masters of this club, around 700 funds. These money managers direct the lion’s share of the hedge fund industry’s total asset base, and by monitoring their matchless equity investments, Insider Monkey has identified several investment strategies that have historically outrun the broader indices. Insider Monkey’s small-cap hedge fund strategy defeated the S&P 500 index by 12 percentage points per year for a decade in their back tests.

With all of this in mind, let’s analyze the key action surrounding BioTelemetry, Inc. (NASDAQ:BEAT).

How have hedgies been trading BioTelemetry, Inc. (NASDAQ:BEAT)?

At the end of the third quarter, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of 15% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

Of the funds tracked by Insider Monkey, J. Carlo Cannell’s Cannell Capital has the biggest position in BioTelemetry, Inc. (NASDAQ:BEAT), worth close to $18.2 million, accounting for 6.8% of its total 13F portfolio. Coming in second is Renaissance Technologies, which holds a $12.3 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining professional money managers that are bullish comprise Craig A. Drill’s Craig Drill Capital, D. E. Shaw’s D E Shaw and Chuck Royce’s Royce & Associates.

Consequently, some big names were breaking ground themselves. Royce & Associates assembled the most outsized position in BioTelemetry, Inc. (NASDAQ:BEAT). Royce & Associates had $3.7 million invested in the company at the end of the quarter. Andy Redleaf’s Whitebox Advisors also initiated a $2 million position during the quarter. The following funds were also among the new BEAT investors: Peter Muller’s PDT Partners, Richard Driehaus’ Driehaus Capital, and Paul Tudor Jones’ Tudor Investment Corp.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as BioTelemetry, Inc. (NASDAQ:BEAT) but similarly valued. We will take a look at First Community Bancshares Inc (NASDAQ:FCBC), Aegean Marine Petroleum Network Inc. (NYSE:ANW), Arbutus Biopharma Corp (NASDAQ:ABUS), and NACCO Industries, Inc. (NYSE:NC). All of these stocks’ market caps are similar to BEAT’s market cap.

As you can see these stocks had an average of 9 hedge funds with bullish positions and the average amount invested in these stocks was $64 million. That figure was $72 million in BEAT’s case. Aegean Marine Petroleum Network Inc. (NYSE:ANW) is the most popular stock in this table with 23 funds holding long stakes in the company as of the end of September. On the other hand NACCO Industries, Inc. (NYSE:NC) is the least popular one with only 5 bullish hedge fund positions. Compared to these stocks BioTelemetry, Inc. (NASDAQ:BEAT) 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.