Looking for stocks with high upside potential? Just follow the big players within the hedge fund industry. Why should you do so? Let’s take a brief look at what statistics have to say about hedge funds’ stock picking abilities to illustrate. The Standard and Poor’s 500 Index returned approximately 5.7% in the 12 months ending October 26 (including dividend payments). Conversely, hedge funds’ 30 preferred S&P 500 stocks (as of June 2014) generated a return of 15.1% during the same 12-month period, with 53% of these stock picks outperforming the broader market benchmark. Coincidence? It might happen to be so, but it is unlikely. Our research covering the last 18 years indicates that hedge funds’ stock picks generate superior risk-adjusted returns. That’s why we believe it is wise to check hedge fund activity before you invest your time or your savings on a stock like BioTelemetry, Inc. (NASDAQ:BEAT).
BioTelemetry, Inc. (NASDAQ:BEAT) has seen an increase in hedge fund sentiment lately. BEAT was in 16 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with BEAT holdings at the end of the previous quarter. Our calculations also showed that BEAT isn’t among the 30 most popular stocks among hedge funds.
According to most investors, hedge funds are viewed as worthless, outdated financial tools of the past. While there are more than 8,000 funds in operation at the moment, Our experts hone in on the moguls of this group, about 700 funds. These money managers watch over bulk of the smart money’s total asset base, and by observing their finest stock picks, Insider Monkey has identified numerous investment strategies that have historically exceeded the market. Insider Monkey’s flagship hedge fund strategy outrun the S&P 500 index by 6 percentage points per year since its inception in May 2014 through early November 2018. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 24% since February 2017 (through December 3rd) even though the market was up nearly 23% during the same period. We just shared a list of 11 short targets in our latest quarterly update.
We’re going to take a look at the recent hedge fund action surrounding BioTelemetry, Inc. (NASDAQ:BEAT).
How have hedgies been trading BioTelemetry, Inc. (NASDAQ:BEAT)?
At the end of the third quarter, a total of 16 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from one quarter earlier. By comparison, 13 hedge funds held shares or bullish call options in BEAT heading into this year. With hedge funds’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were upping their stakes significantly (or already accumulated large positions).
The largest stake in BioTelemetry, Inc. (NASDAQ:BEAT) was held by Harvest Capital Strategies, which reported holding $14.6 million worth of stock at the end of September. It was followed by Ancora Advisors with a $13.8 million position. Other investors bullish on the company included Millennium Management, PDT Partners, and PEAK6 Capital Management.
Now, some big names were breaking ground themselves. Columbus Circle Investors, managed by Principal Global Investors, initiated the biggest position in BioTelemetry, Inc. (NASDAQ:BEAT). Columbus Circle Investors had $3.3 million invested in the company at the end of the quarter. Louis Navellier’s Navellier & Associates also made a $1.7 million investment in the stock during the quarter. The only other fund with a new position in the stock is John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s check out hedge fund activity in other stocks similar to BioTelemetry, Inc. (NASDAQ:BEAT). These stocks are Globant SA (NYSE:GLOB), Retail Opportunity Investments Corp (NASDAQ:ROIC), STAAR Surgical Company (NASDAQ:STAA), and The Children’s Place Inc. (NASDAQ:PLCE). This group of stocks’ market values resemble BEAT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GLOB | 17 | 74680 | -2 |
| ROIC | 11 | 15038 | 7 |
| STAA | 24 | 853639 | 9 |
| PLCE | 23 | 390120 | -2 |
| Average | 18.75 | 333369 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.75 hedge funds with bullish positions and the average amount invested in these stocks was $333 million. That figure was $68 million in BEAT’s case. STAAR Surgical Company (NASDAQ:STAA) is the most popular stock in this table. On the other hand Retail Opportunity Investments Corp (NASDAQ:ROIC) is the least popular one with only 11 bullish hedge fund positions. BioTelemetry, Inc. (NASDAQ:BEAT) 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 STAA might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
