Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Myomo Inc. (NYSE:MYO) in this article.
Is MYO a good stock to buy? Myomo Inc. (NYSE:MYO) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 3 hedge funds’ portfolios at the end of March. Our calculations also showed that MYO isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). At the end of this article we will also compare MYO to other stocks including Sypris Solutions, Inc. (NASDAQ:SYPR), aTyr Pharma Inc. (NASDAQ:LIFE), and Achieve Life Sciences, Inc. (NASDAQ:ACHV) to get a better sense of its popularity.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
John Overdeck of Two Sigma Advisors
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. Now we’re going to go over the recent hedge fund action encompassing Myomo Inc. (NYSE:MYO).
Do Hedge Funds Think MYO Is A Good Stock To Buy Now?
At the end of the first quarter, a total of 3 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the fourth quarter of 2020. On the other hand, there were a total of 2 hedge funds with a bullish position in MYO a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, AIGH Investment Partners held the most valuable stake in Myomo Inc. (NYSE:MYO), which was worth $4.6 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $0.2 million worth of shares. Two Sigma Advisors was 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 AIGH Investment Partners allocated the biggest weight to Myomo Inc. (NYSE:MYO), around 0.96% of its 13F portfolio. Two Sigma Advisors is also relatively very bullish on the stock, setting aside 0.0004 percent of its 13F equity portfolio to MYO.
Due to the fact that Myomo Inc. (NYSE:MYO) has experienced bearish sentiment from the aggregate hedge fund industry, we can see that there were a few hedge funds that decided to sell off their entire stakes heading into Q2. It’s worth mentioning that Renaissance Technologies cut the biggest investment of the “upper crust” of funds tracked by Insider Monkey, worth about $0.9 million in stock. Greg Eisner’s fund, Engineers Gate Manager, also dropped its stock, about $0.1 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks similar to Myomo Inc. (NYSE:MYO). These stocks are Sypris Solutions, Inc. (NASDAQ:SYPR), aTyr Pharma Inc. (NASDAQ:LIFE), Achieve Life Sciences, Inc. (NASDAQ:ACHV), Jerash Holdings (US), Inc. (NASDAQ:JRSH), Ark Restaurants Corp. (NASDAQ:ARKR), Chembio Diagnostics Inc (NASDAQ:CEMI), and Vertex Energy Inc (NASDAQ:VTNR). This group of stocks’ market valuations are closest to MYO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SYPR | 3 | 3437 | 0 |
| LIFE | 6 | 6962 | 2 |
| ACHV | 3 | 3690 | 0 |
| JRSH | 2 | 1527 | 0 |
| ARKR | 1 | 1213 | 0 |
| CEMI | 7 | 3452 | 1 |
| VTNR | 5 | 4142 | 0 |
| Average | 3.9 | 3489 | 0.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.9 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $5 million in MYO’s case. Chembio Diagnostics Inc (NASDAQ:CEMI) is the most popular stock in this table. On the other hand Ark Restaurants Corp. (NASDAQ:ARKR) is the least popular one with only 1 bullish hedge fund positions. Myomo Inc. (NYSE:MYO) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MYO is 51.7. 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 negative signal and 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 surpassed the market again by 3.3 percentage points. Unfortunately MYO wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); MYO investors were disappointed as the stock returned -11.5% 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 most of these stocks already outperformed the market in 2021.
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Disclosure: None. This article was originally published at Insider Monkey.