Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Accolade, Inc. (NASDAQ:ACCD) in this article.
Accolade, Inc. (NASDAQ:ACCD) was in 19 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 21. ACCD has experienced a decrease in hedge fund sentiment lately. There were 21 hedge funds in our database with ACCD holdings at the end of December. Our calculations also showed that ACCD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
According to most traders, hedge funds are perceived as worthless, old investment tools of the past. While there are over 8000 funds trading at present, Our experts look at the aristocrats of this group, approximately 850 funds. It is estimated that this group of investors administer the majority of the hedge fund industry’s total capital, and by keeping an eye on their finest stock picks, Insider Monkey has found a few investment strategies that have historically outstripped the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .
James E. Flynn of Deerfield Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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. Keeping this in mind we’re going to take a look at the key hedge fund action encompassing Accolade, Inc. (NASDAQ:ACCD).
Do Hedge Funds Think ACCD Is A Good Stock To Buy Now?
At Q1’s end, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -10% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in ACCD over the last 23 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, ARK Investment Management was the largest shareholder of Accolade, Inc. (NASDAQ:ACCD), with a stake worth $240.8 million reported as of the end of March. Trailing ARK Investment Management was Select Equity Group, which amassed a stake valued at $92.3 million. Rock Springs Capital Management, Millennium Management, and Sectoral Asset Management 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 Cumberland Associates / Springowl Associates allocated the biggest weight to Accolade, Inc. (NASDAQ:ACCD), around 7.65% of its 13F portfolio. Provenire Capital is also relatively very bullish on the stock, earmarking 2.77 percent of its 13F equity portfolio to ACCD.
Due to the fact that Accolade, Inc. (NASDAQ:ACCD) has faced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there exists a select few money managers that elected to cut their full holdings in the first quarter. Interestingly, James E. Flynn’s Deerfield Management said goodbye to the largest investment of the “upper crust” of funds tracked by Insider Monkey, totaling about $27.8 million in stock, and Anand Parekh’s Alyeska Investment Group was right behind this move, as the fund dumped about $5.4 million worth. These moves are important to note, as total hedge fund interest dropped by 2 funds in the first quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Accolade, Inc. (NASDAQ:ACCD). We will take a look at Xencor Inc (NASDAQ:XNCR), Medifast, Inc. (NYSE:MED), Ameresco Inc (NYSE:AMRC), Rush Enterprises, Inc. (NASDAQ:RUSHB), Telephone & Data Systems, Inc. (NYSE:TDS), First Bancorp (NYSE:FBP), and Academy Sports and Outdoors, Inc. (NASDAQ:ASO). All of these stocks’ market caps resemble ACCD’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| XNCR | 16 | 269589 | 0 |
| MED | 22 | 287110 | 4 |
| AMRC | 16 | 77274 | 1 |
| RUSHB | 4 | 54912 | 1 |
| TDS | 20 | 253689 | -4 |
| FBP | 25 | 294812 | 2 |
| ASO | 37 | 409605 | 11 |
| Average | 20 | 235284 | 2.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $235 million. That figure was $472 million in ACCD’s case. Academy Sports and Outdoors, Inc. (NASDAQ:ASO) is the most popular stock in this table. On the other hand Rush Enterprises, Inc. (NASDAQ:RUSHB) is the least popular one with only 4 bullish hedge fund positions. Accolade, Inc. (NASDAQ:ACCD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ACCD is 52.9. 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 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately ACCD wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); ACCD investors were disappointed as the stock returned 1.4% since the end of March (through 7/16) 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.
Follow Accolade Inc. (NASDAQ:ACCD)
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Disclosure: None. This article was originally published at Insider Monkey.
