The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 752 13F filings that hedge funds and well-known value 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 investors think of Innoviva, Inc. (NASDAQ:INVA).
Innoviva, Inc. (NASDAQ:INVA) was in 24 hedge funds’ portfolios at the end of September. INVA investors should be aware of an increase in support from the world’s most elite money managers in recent months. There were 23 hedge funds in our database with INVA holdings at the end of the previous quarter. Our calculations also showed that INVA 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 financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Noam Gottesman of GLG Partners
Unlike the largest US hedge funds that are convinced Dow will soar past 40,000 or the world’s most bearish hedge fund that’s more convinced than ever that a crash is coming, our long-short investment strategy doesn’t rely on bull or bear markets to deliver double digit returns. We only rely on the best performing hedge funds‘ buy/sell signals. Let’s take a look at the recent hedge fund action encompassing Innoviva, Inc. (NASDAQ:INVA).
How have hedgies been trading Innoviva, Inc. (NASDAQ:INVA)?
At the end of the third quarter, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 4% from the second quarter of 2019. By comparison, 22 hedge funds held shares or bullish call options in INVA a year ago. With the smart money’s capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
More specifically, Renaissance Technologies was the largest shareholder of Innoviva, Inc. (NASDAQ:INVA), with a stake worth $79.9 million reported as of the end of September. Trailing Renaissance Technologies was Sarissa Capital Management, which amassed a stake valued at $65.8 million. D E Shaw, GLG Partners, and Citadel Investment Group 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 Sarissa Capital Management allocated the biggest weight to Innoviva, Inc. (NASDAQ:INVA), around 8.25% of its portfolio. Antara Capital is also relatively very bullish on the stock, dishing out 1.85 percent of its 13F equity portfolio to INVA.
As aggregate interest increased, specific money managers have jumped into Innoviva, Inc. (NASDAQ:INVA) headfirst. Antara Capital, managed by Himanshu Gulati, established the biggest call position in Innoviva, Inc. (NASDAQ:INVA). Antara Capital had $5.8 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also initiated a $0.9 million position during the quarter. The following funds were also among the new INVA investors: Andrew Weiss’s Weiss Asset Management and Gavin Saitowitz and Cisco J. del Valle’s Springbok Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Innoviva, Inc. (NASDAQ:INVA) but similarly valued. We will take a look at CTS Corporation (NYSE:CTS), National Bank Holdings Corporation (NYSE:NBHC), K12 Inc. (NYSE:LRN), and Hess Midstream Partners LP (NYSE:HESM). This group of stocks’ market valuations are closest to INVA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CTS | 10 | 86136 | 1 |
| NBHC | 11 | 78989 | 1 |
| LRN | 17 | 133604 | -5 |
| HESM | 7 | 9217 | 1 |
| Average | 11.25 | 76987 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.25 hedge funds with bullish positions and the average amount invested in these stocks was $77 million. That figure was $225 million in INVA’s case. K12 Inc. (NYSE:LRN) is the most popular stock in this table. On the other hand Hess Midstream Partners LP (NYSE:HESM) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Innoviva, Inc. (NASDAQ:INVA) is more popular among hedge funds. 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. Hedge funds were also right about betting on INVA as the stock returned 27.9% during the first two months of Q4 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.
