Is GMED Stock A Buy or Sell?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 887 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their December 31st holdings, data that is available nowhere else. Should you consider Globus Medical Inc (NYSE:GMED) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.

Is GMED a buy? Globus Medical Inc (NYSE:GMED) investors should be aware of an increase in enthusiasm from smart money recently. Globus Medical Inc (NYSE:GMED) was in 34 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 33. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that GMED isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

In today’s marketplace there are numerous gauges shareholders put to use to grade stocks. A pair of the best gauges are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the top picks of the top investment managers can beat the market by a very impressive amount (see the details here).

Noam Gottesman of GLG Partners

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this psychedelic-drug startup. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. With all of this in mind let’s take a gander at the fresh hedge fund action regarding Globus Medical Inc (NYSE:GMED).

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

At the end of December, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 3% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in GMED over the last 22 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Consonance Capital Management was the largest shareholder of Globus Medical Inc (NYSE:GMED), with a stake worth $59.3 million reported as of the end of December. Trailing Consonance Capital Management was Polar Capital, which amassed a stake valued at $22.4 million. Point72 Asset Management, GLG Partners, and AQR Capital Management 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 Consonance Capital Management allocated the biggest weight to Globus Medical Inc (NYSE:GMED), around 5.54% of its 13F portfolio. Integral Health Asset Management is also relatively very bullish on the stock, designating 0.97 percent of its 13F equity portfolio to GMED.

As aggregate interest increased, key hedge funds have jumped into Globus Medical Inc (NYSE:GMED) headfirst. Consonance Capital Management, managed by Mitchell Blutt, initiated the biggest position in Globus Medical Inc (NYSE:GMED). Consonance Capital Management had $59.3 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $4.7 million position during the quarter. The other funds with brand new GMED positions are Qing Li’s Sciencast Management, Phil Frohlich’s Prescott Group Capital Management, and Brandon Haley’s Holocene Advisors.

Let’s now take a look at hedge fund activity in other stocks similar to Globus Medical Inc (NYSE:GMED). These stocks are Alaska Air Group, Inc. (NYSE:ALK), Nutanix, Inc. (NASDAQ:NTNX), Prosperity Bancshares, Inc. (NYSE:PB), Kohl’s Corporation (NYSE:KSS), Rexford Industrial Realty Inc (NYSE:REXR), Jabil Inc. (NYSE:JBL), and OGE Energy Corp. (NYSE:OGE). This group of stocks’ market caps match GMED’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.7 hedge funds with bullish positions and the average amount invested in these stocks was $482 million. That figure was $192 million in GMED’s case. Kohl’s Corporation (NYSE:KSS) is the most popular stock in this table. On the other hand Prosperity Bancshares, Inc. (NYSE:PB) is the least popular one with only 16 bullish hedge fund positions. Globus Medical Inc (NYSE:GMED) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for GMED is 73.5. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 7.9% in 2021 through April 1st and beat the market again by 0.4 percentage points. Unfortunately GMED wasn’t nearly as popular as these 30 stocks and hedge funds that were betting on GMED were disappointed as the stock returned -5.2% since the end of December (through 4/1) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 30 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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