Is Zomedica Corp. (ZOM) A Good Stock To Buy Now?
Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Zomedica Corp. (NYSE:ZOM), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is Zomedica Corp. (NYSE:ZOM) the right investment to pursue these days? Investors who are in the know were in a bullish mood. The number of long hedge fund bets advanced by 2 recently. Zomedica Corp. (NYSE:ZOM) was in 4 hedge funds' portfolios at the end of the third quarter of 2020. The all time high for this statistics is 5. Our calculations also showed that ZOM isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). There were 2 hedge funds in our database with ZOM holdings at the end of June.
Video: Watch our video about the top 5 most popular hedge fund stocks.
Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 66 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
David Harding of Winton Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website. Keeping this in mind let's take a glance at the fresh hedge fund action surrounding Zomedica Corp. (NYSE:ZOM).
What have hedge funds been doing with Zomedica Corp. (NYSE:ZOM)?
Heading into the fourth quarter of 2020, a total of 4 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 100% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards ZOM over the last 21 quarters. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Israel Englander's Millennium Management has the largest position in Zomedica Corp. (NYSE:ZOM), worth close to $0.3 million, accounting for less than 0.1%% of its total 13F portfolio. On Millennium Management's heels is Citadel Investment Group, managed by Ken Griffin, which holds a $0.1 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that hold long positions comprise David Harding's Winton Capital Management, Hal Mintz's Sabby Capital and . In terms of the portfolio weights assigned to each position Sabby Capital allocated the biggest weight to Zomedica Corp. (NYSE:ZOM), around 0.01% of its 13F portfolio. Winton Capital Management is also relatively very bullish on the stock, setting aside 0.0026 percent of its 13F equity portfolio to ZOM.
Consequently, some big names were breaking ground themselves. Winton Capital Management, managed by David Harding, initiated the most outsized position in Zomedica Corp. (NYSE:ZOM). Winton Capital Management had $0.1 million invested in the company at the end of the quarter. Hal Mintz's Sabby Capital also initiated a $0.1 million position during the quarter.
Let's go over 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 Medallion Financial Corp. (NASDAQ:MFIN), Scully Royalty Ltd. (NYSE:SRL), Oramed Pharmaceuticals Inc. (NASDAQ:ORMP), Garrison Capital Inc (NASDAQ:GARS), Guaranty Federal Bancshares, Inc. (NASDAQ:GFED), Forum Energy Technologies Inc (NYSE:FET), and Tuanche Limited (NASDAQ:TC). This group of stocks' market values are similar to ZOM's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MFIN,6,4169,-2 SRL,2,4086,0 ORMP,7,1819,3 GARS,5,5684,0 GFED,2,1126,0 FET,6,1686,-8 TC,1,11,0 Average,4.1,2654,-1 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.1 hedge funds with bullish positions and the average amount invested in these stocks was $3 million. That figure was $1 million in ZOM's case. Oramed Pharmaceuticals Inc. (NASDAQ:ORMP) is the most popular stock in this table. On the other hand Tuanche Limited (NASDAQ:TC) is the least popular one with only 1 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 56. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through November 27th and still beat the market by 16.1 percentage points. A small number of hedge funds were also right about betting on ZOM as the stock returned 21.8% since the end of the third quarter (through 11/27) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
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