Is NTUS Stock A Buy or Sell?

Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Natus Medical Inc (NASDAQ:NTUS).

Is NTUS stock a buy? The best stock pickers were in a bearish mood. The number of bullish hedge fund positions retreated by 1 recently. Natus Medical Inc (NASDAQ:NTUS) was in 23 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic is 24. Our calculations also showed that NTUS isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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Ric Dillon of Diamond Hill Capital

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Do Hedge Funds Think NTUS Is A Good Stock To Buy Now?

At the end of the fourth quarter, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -4% from the previous quarter. By comparison, 24 hedge funds held shares or bullish call options in NTUS a year ago. 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, Renaissance Technologies, holds the biggest position in Natus Medical Inc (NASDAQ:NTUS). Renaissance Technologies has a $16.5 million position in the stock, comprising less than 0.1%% of its 13F portfolio. Sitting at the No. 2 spot is Impax Asset Management, managed by Ian Simm, which holds a $9.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining peers that are bullish encompass Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Ric Dillon’s Diamond Hill Capital and Ken Fisher’s Fisher Asset Management. In terms of the portfolio weights assigned to each position Rutabaga Capital Management allocated the biggest weight to Natus Medical Inc (NASDAQ:NTUS), around 1.45% of its 13F portfolio. Sio Capital is also relatively very bullish on the stock, designating 0.77 percent of its 13F equity portfolio to NTUS.

Since Natus Medical Inc (NASDAQ:NTUS) has faced bearish sentiment from the aggregate hedge fund industry, it’s easy to see that there lies a certain “tier” of funds that decided to sell off their entire stakes in the fourth quarter. At the top of the heap, Ken Grossman and Glen Schneider’s SG Capital Management dropped the largest stake of the 750 funds watched by Insider Monkey, totaling an estimated $1.1 million in stock, and Dmitry Balyasny’s Balyasny Asset Management was right behind this move, as the fund cut about $0.5 million worth. These transactions are interesting, as aggregate hedge fund interest dropped by 1 funds in the fourth quarter.

Let’s now take a look at hedge fund activity in other stocks similar to Natus Medical Inc (NASDAQ:NTUS). These stocks are Poseida Therapeutics, Inc. (NASDAQ:PSTX), Ready Capital Corporation (NYSE:RC), RPC, Inc. (NYSE:RES), Great Southern Bancorp, Inc. (NASDAQ:GSBC), Mercer International Inc. (NASDAQ:MERC), Amneal Pharmaceuticals, Inc. (NYSE:AMRX), and Apollo Medical Holdings, Inc. (NASDAQ:AMEH). This group of stocks’ market valuations match NTUS’s market valuation.

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As you can see these stocks had an average of 10.6 hedge funds with bullish positions and the average amount invested in these stocks was $49 million. That figure was $83 million in NTUS’s case. RPC, Inc. (NYSE:RES) is the most popular stock in this table. On the other hand Apollo Medical Holdings, Inc. (NASDAQ:AMEH) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Natus Medical Inc (NASDAQ:NTUS) is more popular among hedge funds. Our overall hedge fund sentiment score for NTUS is 82.8. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks returned 12.3% in 2021 through April 19th but still managed to beat the market by 0.9 percentage points. Hedge funds were also right about betting on NTUS as the stock returned 40.1% since the end of December (through 4/19) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.

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Disclosure: None. This article was originally published at Insider Monkey.