Do Hedge Funds Love ICU Medical, Inc. (ICUI)?

·6 min read

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 June. At Insider Monkey, we follow nearly 900 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 ICU Medical, Inc. (NASDAQ:ICUI), so let’s take a closer look at the sentiment that surrounds it in the current quarter.

ICU Medical, Inc. (NASDAQ:ICUI) was in 27 hedge funds' portfolios at the end of June. The all time high for this statistic is 35. ICUI shareholders have witnessed an increase in support from the world's most elite money managers recently. There were 26 hedge funds in our database with ICUI holdings at the end of March. Our calculations also showed that ICUI isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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 let's take a look at the latest hedge fund action encompassing ICU Medical, Inc. (NASDAQ:ICUI).

Do Hedge Funds Think ICUI Is A Good Stock To Buy Now?

At the end of June, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 4% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ICUI over the last 24 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Is ICUI A Good Stock To Buy?
Is ICUI A Good Stock To Buy?

Among these funds, Partner Fund Management held the most valuable stake in ICU Medical, Inc. (NASDAQ:ICUI), which was worth $52.6 million at the end of the second quarter. On the second spot was Nitorum Capital which amassed $52 million worth of shares. Redmile Group, Citadel Investment Group, and Pura Vida Investments 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 Nitorum Capital allocated the biggest weight to ICU Medical, Inc. (NASDAQ:ICUI), around 2.37% of its 13F portfolio. Tamarack Capital Management is also relatively very bullish on the stock, earmarking 1.98 percent of its 13F equity portfolio to ICUI.

As one would reasonably expect, specific money managers were breaking ground themselves. Pura Vida Investments, managed by Efrem Kamen, initiated the most valuable call position in ICU Medical, Inc. (NASDAQ:ICUI). Pura Vida Investments had $14.1 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $8.2 million position during the quarter. The other funds with brand new ICUI positions are Ray Dalio's Bridgewater Associates, Michael Gelband's ExodusPoint Capital, and Paul Tudor Jones's Tudor Investment Corp.

Let's also examine hedge fund activity in other stocks - not necessarily in the same industry as ICU Medical, Inc. (NASDAQ:ICUI) but similarly valued. These stocks are Tenable Holdings, Inc. (NASDAQ:TENB), Magnite Inc. (NASDAQ:MGNI), LivePerson, Inc. (NASDAQ:LPSN), Allison Transmission Holdings Inc (NYSE:ALSN), Commscope Holding Company Inc (NASDAQ:COMM), Ryman Hospitality Properties, Inc. (NYSE:RHP), and Certara, Inc. (NASDAQ:CERT). This group of stocks' market caps are similar to ICUI's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position TENB,33,629836,1 MGNI,29,260767,4 LPSN,27,207746,-4 ALSN,23,389663,-7 COMM,36,1024585,4 RHP,22,342352,0 CERT,7,124316,-5 Average,25.3,425609,-1 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.3 hedge funds with bullish positions and the average amount invested in these stocks was $426 million. That figure was $325 million in ICUI's case. Commscope Holding Company Inc (NASDAQ:COMM) is the most popular stock in this table. On the other hand Certara, Inc. (NASDAQ:CERT) is the least popular one with only 7 bullish hedge fund positions. ICU Medical, Inc. (NASDAQ:ICUI) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ICUI is 63.6. 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 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 24.9% in 2021 through October 15th and still beat the market by 4.5 percentage points. Hedge funds were also right about betting on ICUI as the stock returned 12.2% since the end of Q2 (through 10/15) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.

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