The government requires hedge funds and wealthy investors with over a certain portfolio size to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on September 30. We at Insider Monkey have made an extensive database of more than 700 of those elite funds and prominent investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Accuray Incorporated (NASDAQ:ARAY) based on those filings.
Accuray Incorporated (NASDAQ:ARAY) shareholders have witnessed an increase in hedge fund sentiment recently. ARAY was in 17 hedge funds’ portfolios at the end of September. There were 15 hedge funds in our database with ARAY positions at the end of the previous quarter. Our calculations also showed that aray isn’t among the 30 most popular stocks among hedge funds.
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 market by 18 percentage points since May 2014 through December 3, 2018 (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. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We’re going to take a look at the recent hedge fund action surrounding Accuray Incorporated (NASDAQ:ARAY).
What have hedge funds been doing with Accuray Incorporated (NASDAQ:ARAY)?
At Q3’s end, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of 13% from the second quarter of 2018. Below, you can check out the change in hedge fund sentiment towards ARAY over the last 13 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Accuray Incorporated (NASDAQ:ARAY) was held by Renaissance Technologies, which reported holding $23.9 million worth of stock at the end of September. It was followed by Partner Fund Management with a $17.7 million position. Other investors bullish on the company included Royce & Associates, D E Shaw, and Millennium Management.
Consequently, some big names have jumped into Accuray Incorporated (NASDAQ:ARAY) headfirst. Millennium Management, managed by Israel Englander, created the biggest position in Accuray Incorporated (NASDAQ:ARAY). Millennium Management had $3.1 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also made a $2.4 million investment in the stock during the quarter. The other funds with new positions in the stock are Israel Englander’s Millennium Management, Matthew Hulsizer’s PEAK6 Capital Management, and Paul Tudor Jones’s Tudor Investment Corp.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Accuray Incorporated (NASDAQ:ARAY) but similarly valued. We will take a look at Pensare Acquisition Corp. (NASDAQ:WRLS), Village Super Market, Inc. (NASDAQ:VLGEA), Osiris Therapeutics, Inc. (NASDAQ:OSIR), and Nuvectra Corporation (NASDAQ:NVTR). All of these stocks’ market caps are similar to ARAY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| WRLS | 14 | 44660 | 0 |
| VLGEA | 5 | 52076 | -2 |
| OSIR | 4 | 1533 | 4 |
| NVTR | 20 | 69194 | 4 |
| Average | 10.75 | 41866 | 1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $42 million. That figure was $66 million in ARAY’s case. Nuvectra Corporation (NASDAQ:NVTR) is the most popular stock in this table. On the other hand Osiris Therapeutics, Inc. (NASDAQ:OSIR) is the least popular one with only 4 bullish hedge fund positions. Accuray Incorporated (NASDAQ:ARAY) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard NVTR might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
