Legendary investors such as Leon Cooperman and Seth Klarman earn enormous amounts of money for themselves and their investors by doing in-depth research on small-cap stocks that big brokerage houses don’t publish. Small cap stocks -especially when they are screened well- can generate substantial outperformance versus a boring index fund. That’s why we analyze the activity of those successful funds in these small-cap stocks. In the following paragraphs, we analyze Innoviva Inc (NASDAQ:INVA) from the perspective of those successful funds.
Innoviva Inc (NASDAQ:INVA) was in 21 hedge funds’ portfolios at the end of the third quarter of 2016. INVA investors should pay attention to an increase in hedge fund interest lately. There were 20 hedge funds in our database with INVA holdings at the end of the previous quarter. At the end of this article we will also compare INVA to other stocks including Kearny Financial Corp. (NASDAQ:KRNY), Ameris Bancorp (NASDAQ:ABCB), and Korn/Ferry International (NYSE:KFY) to get a better sense of its popularity.
Follow Innoviva Inc. (NASDAQ:INVA)
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At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
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What have hedge funds been doing with Innoviva Inc (NASDAQ:INVA)?
Heading into the fourth quarter of 2016, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 5% rise from the previous quarter. Below, you can check out the change in hedge fund sentiment towards INVA over the last 5 quarters, which shows a huge spike in Q1. 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 publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Baupost Group, led by Seth Klarman, holds the number one position in Innoviva Inc (NASDAQ:INVA). Baupost Group has a $164.1 million position in the stock, comprising 2.3% of its 13F portfolio. The second most bullish fund manager is Iridian Asset Management, led by David Cohen and Harold Levy, holding a $115 million position; the fund has 1% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions encompass Jamie Zimmerman’s Litespeed Management, Michael A. Price and Amos Meron’s Empyrean Capital Partners, and Alex Denner’s Sarissa Capital Management. We should note that Sarissa Capital Management is among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As industry-wide interest jumped, key money managers were leading the bulls’ herd. Sarissa Capital Management, led by Alex Denner, assembled the biggest position in Innoviva Inc (NASDAQ:INVA). Sarissa Capital Management had $11 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $1.5 million position during the quarter. The following funds were also among the new INVA investors: George Hall’s Clinton Group, Neil Chriss’ Hutchin Hill Capital, and Mike Vranos’ Ellington.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Innoviva Inc(NASDAQ:INVA) but similarly valued. These stocks are Kearny Financial Corp. (NASDAQ:KRNY), Ameris Bancorp (NASDAQ:ABCB), Korn/Ferry International (NYSE:KFY), and Euronav NV Ordinary Shares (NYSE:EURN). This group of stocks’ market caps resemble INVA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KRNY | 18 | 131292 | -1 |
| ABCB | 13 | 76924 | 1 |
| KFY | 9 | 92113 | -4 |
| EURN | 14 | 79877 | -4 |
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $95 million. That figure was $395 million in INVA’s case. Kearny Financial Corp. (NASDAQ:KRNY) is the most popular stock in this table. On the other hand Korn/Ferry International (NYSE:KFY) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Innoviva Inc (NASDAQ:INVA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: None
