Is ICU Medical, Incorporated (ICUI) A Good Stock To Buy?

The worries about the election and the ongoing uncertainty about the path of interest-rate increases have been keeping investors on the sidelines. Of course, most hedge funds and other asset managers have been underperforming main stock market indices since the middle of 2015. Interestingly though, smaller-cap stocks registered their best performance relative to the large-capitalization stocks since the end of the June quarter, suggesting that this may be the best time to take a cue from their stock picks. In fact, the Russell 2000 Index gained more than 15% since the beginning of the third quarter, while the Standard and Poor’s 500 benchmark returned less than 6%. This article will lay out and discuss the hedge fund and institutional investor sentiment towards ICU Medical, Incorporated (NASDAQ:ICUI) .

ICU Medical, Incorporated (NASDAQ:ICUI) was in 15 hedge funds’ portfolios at the end of the third quarter of 2016. ICUI has seen a decrease in activity from the world’s largest hedge funds of late. There were 16 hedge funds in our database with ICUI holdings at the end of the previous quarter. At the end of this article we will also compare ICUI to other stocks including Enbridge Energy Management, L.L.C. (NYSE:EEQ), Franks International NV (NYSE:FI), and Mueller Water Products, Inc. (NYSE:MWA) to get a better sense of its popularity.

At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.

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Keeping this in mind, we’re going to take a look at the latest action surrounding ICU Medical, Incorporated (NASDAQ:ICUI).

What does the smart money think about ICU Medical, Incorporated (NASDAQ:ICUI)?

At Q3’s end, a total of 15 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -6% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ICUI over the last 5 quarters. With hedgies’ positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Renaissance Technologies, one of the largest hedge funds in the world has the largest position in ICU Medical, Incorporated (NASDAQ:ICUI), worth close to $93.4 million, accounting for 0.2% of its total 13F portfolio. On Renaissance Technologies’s heels is Balyasny Asset Management, led by Dmitry Balyasny, holding a $11.6 million position; 0.1% of its 13F portfolio is allocated to the company. Other peers that hold long positions encompass Mario Gabelli’s GAMCO Investors, Joel Greenblatt’s Gotham Asset Management and Ken Fisher’s Fisher Asset Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.

Due to the fact that ICU Medical, Incorporated (NASDAQ:ICUI) has encountered bearish sentiment from the smart money, we can see that there were a few money managers that decided to sell off their positions entirely heading into Q4. Interestingly, Millennium Management, also one of the 10 largest hedge funds in the world, got rid of the largest position of all the hedgies tracked by Insider Monkey, comprising about $8.8 million in stock. Highbridge Capital Management also dropped its stock, about $1.9 million worth.

Let’s also examine hedge fund activity in other stocks similar to ICU Medical, Incorporated (NASDAQ:ICUI). We will take a look at Enbridge Energy Management, L.L.C. (NYSE:EEQ), Franks International NV (NYSE:FI), Mueller Water Products, Inc. (NYSE:MWA), and Artisan Partners Asset Management Inc (NYSE:APAM). This group of stocks’ market valuations are closest to ICUI’s market valuation.

As you can see these stocks had an average of 12 hedge funds with bullish positions and the average amount invested in these stocks was $84 million. That figure was $138 million in ICUI’s case. Mueller Water Products, Inc. (NYSE:MWA) is the most popular stock in this table. On the other hand Enbridge Energy Management, L.L.C. (NYSE:EEQ) is the least popular one with only 6 bullish hedge fund positions. ICU Medical, Incorporated (NASDAQ:ICUI) 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. In this regard MWA might be a better candidate to consider taking a long position in.