Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
One stock that registered an decrease in popularity among smart money investors is MiMedx Group Inc (NASDAQ:MDXG). During the third quarter, the number of funds from our database bullish on the stock declined by three. 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 Compass Diversified Holdings (NYSE:CODI), Maiden Holdings, Ltd. (NASDAQ:MHLD), and Zhaopin Ltd (ADR) (NYSE:ZPIN) to gather more data points.
Follow Mimedx Group Inc. (NASDAQ:MDXG)
Follow Mimedx Group Inc. (NASDAQ:MDXG)
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.
Elena Pavlovich/Shutterstock.com
Keeping this in mind, we’re going to analyze the recent action surrounding MiMedx Group Inc (NASDAQ:MDXG).
How have hedgies been trading MiMedx Group Inc (NASDAQ:MDXG)?
At Q3’s end, seven funds tracked by Insider Monkey were bullish on this stock, d0wn by 30% from the second quarter of 2016. The graph below displays the number of hedge funds with bullish position in MDXG over the last 5 quarters. So, let’s check out 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, Wildcat Capital Management, led by Leonard A. Potter, holds the most valuable position in MiMedx Group Inc (NASDAQ:MDXG). Wildcat Capital Management has a $9.3 million position in the stock, comprising 2.2% of its 13F portfolio. The second largest stake is held by Robert B. Gillam’s McKinley Capital Management, which disclosed a $1.8 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining peers with similar optimism consist of Millennium Management, one of the biggest hedge funds in the world, Joel Greenblatt’s Gotham Asset Management, and Matthew Hulsizer’s PEAK6 Capital 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 MiMedx Group Inc (NASDAQ:MDXG) has witnessed bearish sentiment from the smart money, we can see that there were a few fund managers who sold off their entire stakes last quarter. Intriguingly, Steve Cohen’s Point72 Asset Management dumped the largest investment of the 700 funds tracked by Insider Monkey, comprising an estimated $1.2 million in stock. Ken Griffin’s fund, Citadel Investment Group, also dropped its stock, about $1 million worth.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as MiMedx Group Inc (NASDAQ:MDXG) but similarly valued. These stocks are Compass Diversified Holdings (NYSE:CODI), Maiden Holdings, Ltd. (NASDAQ:MHLD), Zhaopin Ltd (ADR) (NYSE:ZPIN), and Finish Line Inc (NASDAQ:FINL). This group of stocks’ market caps are similar to MDXG’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CODI | 6 | 7828 | -1 |
| MHLD | 13 | 41771 | 3 |
| ZPIN | 4 | 8590 | -2 |
| FINL | 21 | 29157 | 0 |
As you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $22 million. That figure was $14 million in MDXG’s case. Finish Line Inc (NASDAQ:FINL) is the most popular stock in this table. On the other hand Zhaopin Ltd (ADR) (NYSE:ZPIN) is the least popular one with only four bullish hedge fund positions. MiMedx Group Inc (NASDAQ:MDXG) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard FINL might be a better candidate to consider taking a long position in.
Disclosure: none
