Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the fourth quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 6 years and analyze what the smart money thinks of Zomedica Corp. (NYSE:ZOM) based on that data.
Zomedica Corp. (NYSE:ZOM) shareholders have witnessed an increase in support from the world's most elite money managers lately. Zomedica Corp. (NYSE:ZOM) was in 5 hedge funds' portfolios at the end of March. The all time high for this statistic is 5. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ZOM isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Michael Gelband of ExodusPoint Capital
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $27 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. With all of this in mind we're going to take a gander at the key hedge fund action encompassing Zomedica Corp. (NYSE:ZOM).
Do Hedge Funds Think ZOM Is A Good Stock To Buy Now?
At Q1's end, a total of 5 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 67% from the fourth quarter of 2020. By comparison, 1 hedge funds held shares or bullish call options in ZOM a year ago. So, let's examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Citadel Investment Group was the largest shareholder of Zomedica Corp. (NYSE:ZOM), with a stake worth $3.2 million reported as of the end of March. Trailing Citadel Investment Group was Millennium Management, which amassed a stake valued at $2.2 million. ExodusPoint Capital, Gotham Asset Management, and Engineers Gate Manager were 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 0 allocated the biggest weight to Zomedica Corp. (NYSE:ZOM), around 0.02% of its 13F portfolio. 0 is also relatively very bullish on the stock, earmarking 0.01 percent of its 13F equity portfolio to ZOM.
As aggregate interest increased, key hedge funds have jumped into Zomedica Corp. (NYSE:ZOM) headfirst. ExodusPoint Capital, managed by Michael Gelband, established the largest position in Zomedica Corp. (NYSE:ZOM). ExodusPoint Capital had $1.3 million invested in the company at the end of the quarter. Joel Greenblatt's Gotham Asset Management also initiated a $0.2 million position during the quarter. The only other fund with a new position in the stock is Greg Eisner's Engineers Gate Manager.
Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as Zomedica Corp. (NYSE:ZOM) but similarly valued. We will take a look at Ladder Capital Corp (NYSE:LADR), Guess', Inc. (NYSE:GES), Luminex Corporation (NASDAQ:LMNX), Tennant Company (NYSE:TNC), Usa Compression Partners LP (NYSE:USAC), Heron Therapeutics Inc (NASDAQ:HRTX), and Oxford Industries, Inc. (NYSE:OXM). This group of stocks' market caps match ZOM's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LADR,11,31426,3 GES,20,97999,1 LMNX,25,231366,2 TNC,14,62656,1 USAC,2,6041,0 HRTX,14,211188,0 OXM,7,50002,0 Average,13.3,98668,1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.3 hedge funds with bullish positions and the average amount invested in these stocks was $99 million. That figure was $7 million in ZOM's case. Luminex Corporation (NASDAQ:LMNX) is the most popular stock in this table. On the other hand Usa Compression Partners LP (NYSE:USAC) is the least popular one with only 2 bullish hedge fund positions. Zomedica Corp. (NYSE:ZOM) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ZOM is 43.5. 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 17.4% in 2021 through June 18th and surpassed the market again by 6.1 percentage points. Unfortunately ZOM wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ZOM investors were disappointed as the stock returned -43.9% since the end of March (through 6/18) 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.