Hedge funds run by legendary names like Nelson Peltz and David Tepper make billions of dollars a year for themselves and their super-rich accredited investors (you’ve got to have a minimum of $1 million liquid to invest in a hedge fund) by spending enormous resources on analyzing and uncovering data about small-cap stocks that the big brokerage houses don’t follow. Small caps are where they can generate significant out-performance. These stocks have been on a tear since the end of June, outperforming large-cap index funds by more than 10 percentage points. That’s why we pay special attention to hedge fund activity in these stocks.
RadNet Inc. (NASDAQ:RDNT) was in 8 hedge funds’ portfolios at the end of September. RDNT shareholders have witnessed a decrease in hedge fund interest of late. There were 9 hedge funds in our database with RDNT holdings at the end of the previous quarter. At the end of this article we will also compare RDNT to other stocks including Corvus Pharmaceuticals Inc (NASDAQ:CRVS), Natural Resource Partners LP (NYSE:NRP), and Arlington Asset Investment Corp (NYSE:AI) to get a better sense of its popularity.
Follow Radnet Inc. (NASDAQ:RDNT)
Follow Radnet Inc. (NASDAQ:RDNT)
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.
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Keeping this in mind, we’re going to take a look at the new action regarding RadNet Inc. (NASDAQ:RDNT).
How have hedgies been trading RadNet Inc. (NASDAQ:RDNT)?
At the end of the third quarter, a total of 8 of the hedge funds tracked by Insider Monkey were long this stock, a decline of 11% from the second quarter of 2016. On the other hand, there were a total of 10 hedge funds with a bullish position in RDNT at the beginning of this year. With hedgies’ sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Richard Mashaal’s Rima Senvest Management has the most valuable position in RadNet Inc. (NASDAQ:RDNT), worth close to $30.9 million, amounting to 2.2% of its total 13F portfolio. Coming in second is Jonathan Lourie and Stuart Fiertz of Cheyne Capital, with a $3.5 million position; 2.1% of its 13F portfolio is allocated to the stock. Remaining peers that are bullish contain Renaissance Technologies, one of the largest hedge funds in the world, John Overdeck and David Siegel’s Two Sigma Advisors and Cliff Asness’ AQR 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.
Because RadNet Inc. (NASDAQ:RDNT) has sustained declining sentiment from the aggregate hedge fund industry, we can see that there were a few fund managers who sold off their entire stakes heading into Q4. At the top of the heap, James Dondero’s Highland Capital Management said goodbye to the biggest investment of the “upper crust” of funds monitored by Insider Monkey, totaling an estimated $0.2 million in stock, and Ken Griffin’s Citadel Investment Group was right behind this move, as the fund dropped about $0.1 million worth of shares.
Let’s now take a look at hedge fund activity in other stocks similar to RadNet Inc. (NASDAQ:RDNT). These stocks are Corvus Pharmaceuticals Inc (NASDAQ:CRVS), Natural Resource Partners LP (NYSE:NRP), Arlington Asset Investment Corp (NYSE:AI), and Vivint Solar Inc (NYSE:VSLR). This group of stocks’ market caps are closest to RDNT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CRVS | 5 | 105640 | 0 |
| NRP | 5 | 6188 | 5 |
| AI | 6 | 12969 | 1 |
| VSLR | 4 | 11539 | -2 |
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $34 million. That figure was $39 million in RDNT’s case. Arlington Asset Investment Corp (NYSE:AI) is the most popular stock in this table. On the other hand Vivint Solar Inc (NYSE:VSLR) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks RadNet Inc. (NASDAQ:RDNT) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
