You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Medgenics Inc (NASDAQ:MDGN) was in 9 hedge funds’ portfolios at the end of the third quarter of 2016. MDGN has seen a decrease in support from the world’s most successful money managers in recent months. There were 10 hedge funds in our database with MDGN holdings at the end of the second quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Evolution Petroleum Corporation (NYSEAMEX:EPM), Newtek Business Services, Inc (NASDAQ:NEWT), and West Marine, Inc. (NASDAQ:WMAR) to gather more data points.
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Hedge fund activity in Medgenics Inc (NASDAQ:MDGN)
Heading into the fourth quarter of 2016, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, a drop of 10% from one quarter earlier. The graph below displays the number of hedge funds with bullish positions in MDGN over the last 5 quarters, which has been somewhat volatile, fluctuating between gains and declines. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Broadfin Capital, led by Kevin Kotler, holds the largest position in Medgenics Inc (NASDAQ:MDGN). Broadfin Capital has an $18.8 million position in the stock, comprising 1.7% of its 13F portfolio. Coming in second is Adage Capital Management, led by Phill Gross and Robert Atchinson, which holds an $11.7 million position. Some other peers with similar optimism comprise James A. Silverman’s Opaleye Management, Julian Baker and Felix Baker’s Baker Bros. Advisors, and Eli Casdin’s Casdin Capital. 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-micro-cap stocks.
Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that dropped their entire stakes in the stock during the third quarter. Intriguingly, Anand Parekh’s Alyeska Investment Group dropped the largest stake of the “upper crust” of funds tracked by Insider Monkey, worth an estimated $0.6 million in stock, and Paul Tudor Jones’ Tudor Investment Corp was right behind this move, as the fund said goodbye to about $0.4 million worth of shares.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Medgenics Inc (NASDAQ:MDGN) but similarly valued. We will take a look at Evolution Petroleum Corporation (NYSEAMEX:EPM), Newtek Business Services, Inc (NASDAQ:NEWT), West Marine, Inc. (NASDAQ:WMAR), and eHealth, Inc. (NASDAQ:EHTH). This group of stocks’ market valuations match MDGN’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EPM | 6 | 10923 | 3 |
| NEWT | 6 | 7903 | 0 |
| WMAR | 9 | 28869 | 3 |
| EHTH | 13 | 88330 | 0 |
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 $34 million. That figure was $51 million in MDGN’s case. eHealth, Inc. (NASDAQ:EHTH) is the most popular stock in this table. On the other hand Evolution Petroleum Corporation (NYSEAMEX:EPM) is the least popular one with only 6 bullish hedge fund positions. Medgenics Inc (NASDAQ:MDGN) 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 EHTH might be a better candidate to consider taking a long position in.
Disclosure: None