Hedge funds and other investment firms that we track manage billions of dollars of their wealthy clients’ money, and needless to say, they are painstakingly thorough when analyzing where to invest this money, as their own wealth depends on it. Regardless of the various methods used by elite investors like David Tepper and Dan Loeb, the resources they expend are second-to-none. This is especially valuable when it comes to small-cap stocks, which is where they generate their strongest outperformance, as their resources give them a huge edge when it comes to studying these stocks compared to the average investor, which is why we intently follow their activity in the small-cap space.
Is Exelixis, Inc. (NASDAQ:EXEL) a buy right now? Hedge funds are becoming hopeful. The number of long hedge fund positions improved by 2 in recent months. EXEL was in 12 hedge funds’ portfolios at the end of the third quarter of 2015. There were 10 hedge funds in our database with EXEL holdings at the end of the previous quarter. At the end of this article we will also compare EXEL to other stocks including Archrock Inc. (NYSE:AROC), KB Home (NYSE:KBH), and Vonage Holdings Corp. (NYSE:VG) to get a better sense of its popularity.
Follow Exelixis Inc. (NASDAQ:EXEL)
Follow Exelixis Inc. (NASDAQ:EXEL)
With all of this in mind, let’s check out the recent action surrounding Exelixis, Inc. (NASDAQ:EXEL).
Hedge fund activity in Exelixis, Inc. (NASDAQ:EXEL)
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 20% from one quarter earlier. With hedgies’ positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Kenneth Tropin’s Graham Capital Management has the most valuable position in Exelixis, Inc. (NASDAQ:EXEL), worth close to $15.9 million, corresponding to 1.9% of its total 13F portfolio. The second most bullish fund manager is Great Point Partners, managed by Jeffrey Jay and David Kroin, which holds a $8.9 million position; the fund has 3.5% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions include Mark Kingdon’s Kingdon Capital, Richard Driehaus’s Driehaus Capital and Peter Muller’s PDT Partners.
Consequently, key money managers have been driving this bullishness. Great Point Partners, managed by Jeffrey Jay and David Kroin, assembled the largest position in Exelixis, Inc. (NASDAQ:EXEL). Great Point Partners had $8.9 million invested in the company at the end of the quarter. Mark Kingdon’s Kingdon Capital also initiated a $4.6 million position during the quarter. The other funds with new positions in the stock are Richard Driehaus’s Driehaus Capital, Peter Muller’s PDT Partners, and John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s check out hedge fund activity in other stocks similar to Exelixis, Inc. (NASDAQ:EXEL). These stocks are Archrock Inc. (NYSE:AROC), KB Home (NYSE:KBH), Vonage Holdings Corp. (NYSE:VG), and Cohen & Steers, Inc. (NYSE:CNS). This group of stocks’ market valuations resemble EXEL’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EXH | 26 | 405310 | -5 |
| KBH | 19 | 329236 | -6 |
| VG | 19 | 109893 | 3 |
| CNS | 13 | 63867 | -1 |
As you can see these stocks had an average of 19.25 hedge funds with bullish positions and the average amount invested in these stocks was $227 million. That figure was $40 million in EXEL’s case. Archrock Inc. (NYSE:AROC) is the most popular stock in this table. On the other hand Cohen & Steers, Inc. (NYSE:CNS) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Exelixis, Inc. (NASDAQ:EXEL) is even less popular than CNS. Considering that hedge funds aren’t fond of this stock in relation to other companies analyzed in this article, it may be a good idea to analyze it in detail and understand why the smart money isn’t behind this stock. This isn’t necessarily bad news. Although it is possible that hedge funds may think the stock is overpriced and view the stock as a short candidate, they may not be very familiar with the bullish thesis. In either case more research is warranted.
