Hedge Funds Are Selling Exelixis, Inc. (EXEL)

In this article you are going to find out whether hedge funds think Exelixis, Inc. (NASDAQ:EXEL) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Exelixis, Inc. (NASDAQ:EXEL) has seen a decrease in activity from the world’s largest hedge funds recently. Exelixis, Inc. (NASDAQ:EXEL) was in 30 hedge funds’ portfolios at the end of September. The all time high for this statistic is 39. There were 33 hedge funds in our database with EXEL positions at the end of the second quarter. Our calculations also showed that EXEL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so 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. With all of this in mind we’re going to check out the recent hedge fund action regarding Exelixis, Inc. (NASDAQ:EXEL).

David Siegel of Two Sigma Advisors

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

At the end of the third quarter, a total of 30 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -9% from the second quarter of 2021. By comparison, 34 hedge funds held shares or bullish call options in EXEL a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Renaissance Technologies was the largest shareholder of Exelixis, Inc. (NASDAQ:EXEL), with a stake worth $371 million reported as of the end of September. Trailing Renaissance Technologies was Farallon Capital, which amassed a stake valued at $204.2 million. Polar Capital, Two Sigma Advisors, and Point72 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 Great Point Partners allocated the biggest weight to Exelixis, Inc. (NASDAQ:EXEL), around 7.51% of its 13F portfolio. Farallon Capital is also relatively very bullish on the stock, setting aside 1.03 percent of its 13F equity portfolio to EXEL.

Seeing as Exelixis, Inc. (NASDAQ:EXEL) has faced bearish sentiment from the smart money, it’s easy to see that there were a few money managers who were dropping their entire stakes heading into Q4. Interestingly, Dmitry Balyasny’s Balyasny Asset Management dumped the biggest position of the 750 funds watched by Insider Monkey, worth an estimated $3.9 million in stock, and Ian Simm’s Impax Asset Management was right behind this move, as the fund dumped about $2.4 million worth. These transactions are important to note, as total hedge fund interest fell by 3 funds heading into Q4.

Let’s now take a look at hedge fund activity in other stocks similar to Exelixis, Inc. (NASDAQ:EXEL). We will take a look at Beyond Meat, Inc. (NASDAQ:BYND), Prosperity Bancshares, Inc. (NYSE:PB), Digital Turbine Inc (NASDAQ:APPS), OGE Energy Corp. (NYSE:OGE), J2 Global Inc (NASDAQ:JCOM), Appian Corporation (NASDAQ:APPN), and Huntsman Corporation (NYSE:HUN). This group of stocks’ market valuations resemble EXEL’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.7 hedge funds with bullish positions and the average amount invested in these stocks was $379 million. That figure was $897 million in EXEL’s case. Huntsman Corporation (NYSE:HUN) is the most popular stock in this table. On the other hand Beyond Meat, Inc. (NASDAQ:BYND) is the least popular one with only 16 bullish hedge fund positions. Compared to these stocks Exelixis, Inc. (NASDAQ:EXEL) is more popular among hedge funds. Our overall hedge fund sentiment score for EXEL is 75.1. 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 28.6% in 2021 through November 30th and still beat the market by 5.6 percentage points. Unfortunately EXEL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on EXEL were disappointed as the stock returned -20.6% since the end of the third quarter (through 11/30) 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 since 2019.

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