Should You Follow the Smart Money Surge into AngioDynamics, Inc. (ANGO)?

Reputable billionaire investors such as Nelson Peltz and David Tepper generate exorbitant profits for their wealthy accredited investors (a minimum of $1 million in investable assets would be required to invest in a hedge fund and most successful hedge funds won’t accept your savings unless you commit at least $5 million) by pinpointing winning small-cap stocks. There is little or no publicly-available information at all on some of these small companies, which makes it hard for an individual investor to pin down a winner within the small-cap space. However, hedge funds and other big asset managers can do the due diligence and analysis for you instead, thanks to their highly-skilled research teams and vast resources to conduct an appropriate evaluation process. Looking for potential winners within the small-cap galaxy of stocks? We believe following the smart money is a good starting point.

Is AngioDynamics, Inc. (NASDAQ:ANGO) a splendid stock to buy now? The smart money is undeniably taking an optimistic view. The number of long hedge fund bets that are revealed through the 13F filings experienced an increase of 5 lately. ANGO was in 17 hedge funds’ portfolios at the end of the third quarter of 2016. There were 12 hedge funds in our database with ANGO holdings at the end of the previous quarter. At the end of this article we will also compare ANGO to other stocks including Cerus Corporation (NASDAQ:CERS), Thermon Group Holdings Inc (NYSE:THR), and Eastman Kodak Co. (NYSE:KODK) to get a better sense of its popularity.

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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How have hedgies been trading AngioDynamics, Inc. (NASDAQ:ANGO)?

Heading into the fourth quarter of 2016, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a 42% jump from one quarter earlier, pushing hedge fund ownership of the stock to a yearly high. The graph below displays the number of hedge funds with bullish position in ANGO over the last 5 quarters. So, let’s review 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, Kevin Kotler’s Broadfin Capital holds the most valuable position in AngioDynamics, Inc. (NASDAQ:ANGO) which has a $50.7 million position in the stock, comprising 4.5% of its 13F portfolio. The second most bullish fund manager is Robert G. Moses of RGM Capital, with a $47.4 million position; the fund has 5.3% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish comprise Chuck Royce’s Royce & Associates, Renaissance Technologies, one of the largest hedge funds in the world, and Israel Englander’s Millennium Management. We should note that RGM Capital is 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.

As industry-wide interest jumped, key money managers have jumped into AngioDynamics, Inc. (NASDAQ:ANGO) headfirst. Cliff Asness of AQR Capital Management assembled the largest position in AngioDynamics, Inc. (NASDAQ:ANGO). AQR Capital Management had $1.5 million invested in the company at the end of the quarter. Paul Tudor Jones’ Tudor Investment Corp also made a $1 million investment in the stock during the quarter. The other funds with new positions in the stock are Peter Algert and Kevin Coldiron’s Algert Coldiron Investors, Ken Griffin’s Citadel Investment Group, and Glenn Russell Dubin’s Highbridge Capital Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as AngioDynamics, Inc. (NASDAQ:ANGO) but similarly valued. These stocks are Cerus Corporation (NASDAQ:CERS), Thermon Group Holdings Inc (NYSE:THR), Eastman Kodak Co. (NYSE:KODK), and Winnebago Industries, Inc. (NYSE:WGO). This group of stocks’ market valuations are similar to ANGO’s market valuation.

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 $92 million. That figure was $139 million in ANGO’s case. Eastman Kodak Co. (NYSE:KODK) is the most popular stock in this table. On the other hand Thermon Group Holdings Inc (NYSE:THR) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks AngioDynamics, Inc. (NASDAQ:ANGO) 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