Hedge Funds Are Piling Into Renalytix Plc (RNLX)

The 800+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 30th. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Renalytix Plc (NASDAQ:RNLX).

Is Renalytix Plc (NASDAQ:RNLX) going to take off soon? Money managers were getting more optimistic. The number of bullish hedge fund bets improved by 3 lately. Renalytix Plc (NASDAQ:RNLX) was in 10 hedge funds’ portfolios at the end of June. The all time high for this statistic is 7. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that RNLX isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 7 hedge funds in our database with RNLX holdings at the end of March.

At the moment there are tons of indicators shareholders employ to assess their holdings. A pair of the less known indicators are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the best hedge fund managers can outpace the market by a healthy amount (see the details here). Also, our monthly newsletter’s portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website .

Matthew Halbower of Pentwater Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. 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. Now we’re going to analyze the new hedge fund action encompassing Renalytix Plc (NASDAQ:RNLX).

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

Heading into the third quarter of 2021, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 43% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in RNLX 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.

Among these funds, Parian Global Management held the most valuable stake in Renalytix Plc (NASDAQ:RNLX), which was worth $15.9 million at the end of the second quarter. On the second spot was SilverArc Capital which amassed $3.9 million worth of shares. Pentwater Capital Management, Soleus Capital, and Manatuck Hill Partners 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 Parian Global Management allocated the biggest weight to Renalytix Plc (NASDAQ:RNLX), around 6.81% of its 13F portfolio. SilverArc Capital is also relatively very bullish on the stock, setting aside 1.74 percent of its 13F equity portfolio to RNLX.

As industrywide interest jumped, key hedge funds were leading the bulls’ herd. Plaisance Capital, managed by Dan Kozlowski, initiated the most outsized position in Renalytix Plc (NASDAQ:RNLX). Plaisance Capital had $0.7 million invested in the company at the end of the quarter. Ken Griffin’s Citadel Investment Group also initiated a $0.6 million position during the quarter. The only other fund with a new position in the stock is Renaissance Technologies.

Let’s also examine hedge fund activity in other stocks similar to Renalytix Plc (NASDAQ:RNLX). These stocks are Personalis, Inc. (NASDAQ:PSNL), Cryolife Inc (NYSE:CRY), Huron Consulting Group Inc. (NASDAQ:HURN), Accel Entertainment, Inc. (NYSE:ACEL), Central Securities Corporation (NYSE:CET), Ingles Markets, Incorporated (NASDAQ:IMKTA), and Design Therapeutics, Inc. (NASDAQ:DSGN). This group of stocks’ market values match RNLX’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.1 hedge funds with bullish positions and the average amount invested in these stocks was $147 million. That figure was $29 million in RNLX’s case. Ingles Markets, Incorporated (NASDAQ:IMKTA) is the most popular stock in this table. On the other hand Central Securities Corporation (NYSE:CET) is the least popular one with only 3 bullish hedge fund positions. Renalytix Plc (NASDAQ:RNLX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for RNLX is 64.9. 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 25.7% in 2021 through September 27th and surpassed the market again by 6.2 percentage points. Unfortunately RNLX wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); RNLX investors were disappointed as the stock returned -34.7% since the end of June (through 9/27) 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.