“Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn’t by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today’s darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn’t attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal,” said Vilas Fund in its Q1 investor letter. We aren’t sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Calyxt, Inc. (NASDAQ:CLXT).
Is Calyxt, Inc. (NASDAQ:CLXT) a buy here? Money managers are in an optimistic mood. The number of long hedge fund bets inched up by 2 lately. Our calculations also showed that CLXT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most investors, hedge funds are viewed as underperforming, outdated investment tools of yesteryear. While there are greater than 8000 funds with their doors open today, Our experts hone in on the masters of this group, approximately 750 funds. These hedge fund managers orchestrate the lion’s share of all hedge funds’ total capital, and by keeping an eye on their inimitable equity investments, Insider Monkey has determined a number of investment strategies that have historically outperformed Mr. Market. Insider Monkey’s flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points a year since its inception in May 2014. Our portfolio of short stocks lost 27.8% since February 2017 (through November 21st) even though the market was up more than 39% during the same period. We just shared a list of 7 short targets in our latest quarterly update .
Paul Marshall of Marshall Wace
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. Keeping this in mind let’s go over the latest hedge fund action surrounding Calyxt, Inc. (NASDAQ:CLXT).
How are hedge funds trading Calyxt, Inc. (NASDAQ:CLXT)?
At the end of the third quarter, a total of 5 of the hedge funds tracked by Insider Monkey were long this stock, a change of 67% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in CLXT over the last 17 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).
Among these funds, Columbus Hill Capital Management held the most valuable stake in Calyxt, Inc. (NASDAQ:CLXT), which was worth $2.5 million at the end of the third quarter. On the second spot was Millennium Management which amassed $0.3 million worth of shares. Renaissance Technologies, Citadel Investment Group, and Marshall Wace 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 Columbus Hill Capital Management allocated the biggest weight to Calyxt, Inc. (NASDAQ:CLXT), around 0.31% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, setting aside 0.0004 percent of its 13F equity portfolio to CLXT.
As aggregate interest increased, key money managers were leading the bulls’ herd. Renaissance Technologies established the most outsized position in Calyxt, Inc. (NASDAQ:CLXT). Renaissance Technologies had $0.2 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace also made a $0 million investment in the stock during the quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Calyxt, Inc. (NASDAQ:CLXT) but similarly valued. We will take a look at Bel Fuse, Inc. (NASDAQ:BELFB), FedNat Holding Company (NASDAQ:FNHC), Foamix Pharmaceuticals Ltd (NASDAQ:FOMX), and Evans Bancorp Inc. (NYSE:EVBN). This group of stocks’ market values are closest to CLXT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BELFB | 7 | 18883 | 0 |
| FNHC | 7 | 24724 | 0 |
| FOMX | 12 | 59402 | -1 |
| EVBN | 3 | 5829 | 1 |
| Average | 7.25 | 27210 | 0 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 7.25 hedge funds with bullish positions and the average amount invested in these stocks was $27 million. That figure was $3 million in CLXT’s case. Foamix Pharmaceuticals Ltd (NASDAQ:FOMX) is the most popular stock in this table. On the other hand Evans Bancorp Inc. (NYSE:EVBN) is the least popular one with only 3 bullish hedge fund positions. Calyxt, Inc. (NASDAQ:CLXT) is not the least popular stock in this group but hedge fund interest is still below average. 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 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately CLXT wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); CLXT investors were disappointed as the stock returned -34.8% during the first two months of the fourth quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.
Disclosure: None. This article was originally published at Insider Monkey.