We at Insider Monkey have gone over 867 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of InVitae Corporation (NYSE:NVTA) based on that data.
Is InVitae Corporation (NYSE:NVTA) a buy here? Investors who are in the know were taking a bearish view. The number of bullish hedge fund positions decreased by 7 recently. InVitae Corporation (NYSE:NVTA) was in 24 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 35. Our calculations also showed that NVTA 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. Keeping this in mind let’s take a glance at the fresh hedge fund action encompassing InVitae Corporation (NYSE:NVTA).
Felix Baker of Baker Bros.
Do Hedge Funds Think NVTA Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -23% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards NVTA over the last 25 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.
According to Insider Monkey’s hedge fund database, Catherine D. Wood’s ARK Investment Management has the biggest position in InVitae Corporation (NYSE:NVTA), worth close to $736.8 million, amounting to 1.8% of its total 13F portfolio. The second most bullish fund manager is Eli Casdin of Casdin Capital, with a $347 million position; the fund has 8.6% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions contain Julian Baker and Felix Baker’s Baker Bros. Advisors, Jeremy Green’s Redmile Group and Joseph Edelman’s Perceptive Advisors. In terms of the portfolio weights assigned to each position Casdin Capital allocated the biggest weight to InVitae Corporation (NYSE:NVTA), around 8.64% of its 13F portfolio. Redmile Group is also relatively very bullish on the stock, setting aside 2.64 percent of its 13F equity portfolio to NVTA.
Seeing as InVitae Corporation (NYSE:NVTA) has faced bearish sentiment from the smart money, it’s safe to say that there lies a certain “tier” of funds that elected to cut their entire stakes heading into Q4. At the top of the heap, Glen Kacher’s Light Street Capital dropped the largest stake of the 750 funds followed by Insider Monkey, comprising close to $60.8 million in stock. Aaron Cowen’s fund, Suvretta Capital Management, also dropped its stock, about $58 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 7 funds heading into Q4.
Let’s now review hedge fund activity in other stocks similar to InVitae Corporation (NYSE:NVTA). These stocks are Grupo Televisa SAB (NYSE:TV), Switch, Inc. (NYSE:SWCH), Denali Therapeutics Inc. (NASDAQ:DNLI), Coherent, Inc. (NASDAQ:COHR), Paycor HCM Inc. (NASDAQ:PYCR), Cricut, Inc. (NASDAQ:CRCT), and RBC Bearings Incorporated (NASDAQ:ROLL). This group of stocks’ market caps are similar to NVTA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TV | 16 | 843545 | -1 |
| SWCH | 17 | 229494 | 1 |
| DNLI | 23 | 179874 | 1 |
| COHR | 37 | 1464037 | -6 |
| PYCR | 9 | 21437 | 9 |
| CRCT | 9 | 284261 | -4 |
| ROLL | 22 | 225522 | 13 |
| Average | 19 | 464024 | 1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 19 hedge funds with bullish positions and the average amount invested in these stocks was $464 million. That figure was $1807 million in NVTA’s case. Coherent, Inc. (NASDAQ:COHR) is the most popular stock in this table. On the other hand Paycor HCM Inc. (NASDAQ:PYCR) is the least popular one with only 9 bullish hedge fund positions. InVitae Corporation (NYSE:NVTA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NVTA is 45.4. 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 positive signal but 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately NVTA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NVTA were disappointed as the stock returned -42.1% since the end of September (through 12/9) 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 many of these stocks already outperformed the market since 2019.
Follow Invitae Corp (NYSE:NVTA)
Follow Invitae Corp (NYSE:NVTA)
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Disclosure: None. This article was originally published at Insider Monkey.
