In this article we will take a look at whether hedge funds think Mediwound Ltd (NASDAQ:MDWD) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Is MDWD a good stock to buy? The best stock pickers were in an optimistic mood. The number of bullish hedge fund bets advanced by 2 lately. Mediwound Ltd (NASDAQ:MDWD) was in 4 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 6. Our calculations also showed that MDWD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Israel Englander of Millennium Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind we’re going to take a peek at the recent hedge fund action regarding Mediwound Ltd (NASDAQ:MDWD).
Do Hedge Funds Think MDWD Is A Good Stock To Buy Now?
At the end of March, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 100% from one quarter earlier. By comparison, 1 hedge funds held shares or bullish call options in MDWD a year ago. With hedgies’ capital changing hands, there exists a few key hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, holds the largest position in Mediwound Ltd (NASDAQ:MDWD). Renaissance Technologies has a $3.7 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Coming in second is Zachary Miller of Parian Global Management, with a $3.7 million position; 1.7% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that hold long positions comprise Israel Englander’s Millennium Management, Ken Griffin’s Citadel Investment Group and . In terms of the portfolio weights assigned to each position Parian Global Management allocated the biggest weight to Mediwound Ltd (NASDAQ:MDWD), around 1.69% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, designating 0.0046 percent of its 13F equity portfolio to MDWD.
As industrywide interest jumped, key money managers were breaking ground themselves. Parian Global Management, managed by Zachary Miller, initiated the most outsized position in Mediwound Ltd (NASDAQ:MDWD). Parian Global Management had $3.7 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also made a $0.1 million investment in the stock during the quarter.
Let’s also examine hedge fund activity in other stocks similar to Mediwound Ltd (NASDAQ:MDWD). These stocks are Molecular Data Inc. (NASDAQ:MKD), California BanCorp (NASDAQ:CALB), Oconee Federal Financial Corp. (NASDAQ:OFED), China Automotive Systems, Inc. (NASDAQ:CAAS), Dynagas LNG Partners LP (NYSE:DLNG), Western Copper and Gold Corporation (NYSE:WRN), and Computer Task Group, Inc. (NASDAQ:CTG). This group of stocks’ market valuations resemble MDWD’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MKD | 3 | 832 | 1 |
| CALB | 4 | 6061 | 1 |
| OFED | 1 | 299 | -1 |
| CAAS | 1 | 2401 | -4 |
| DLNG | 1 | 60 | 1 |
| WRN | 2 | 852 | -1 |
| CTG | 6 | 30525 | 1 |
| Average | 2.6 | 5861 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.6 hedge funds with bullish positions and the average amount invested in these stocks was $6 million. That figure was $8 million in MDWD’s case. Computer Task Group, Inc. (NASDAQ:CTG) is the most popular stock in this table. On the other hand Oconee Federal Financial Corp. (NASDAQ:OFED) is the least popular one with only 1 bullish hedge fund positions. Mediwound Ltd (NASDAQ:MDWD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MDWD is 57. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 17.2% in 2021 through June 11th and beat the market again by 3.3 percentage points. Unfortunately MDWD wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on MDWD were disappointed as the stock returned -16% since the end of March (through 6/11) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 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.
