In this article we will take a look at whether hedge funds think Codexis, Inc. (NASDAQ:CDXS) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure, they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.
Codexis, Inc. (NASDAQ:CDXS) was in 21 hedge funds’ portfolios at the end of the third quarter of 2021. The all-time high for this statistic was previously 16. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. CDXS investors should be aware of an increase in enthusiasm from smart money recently. There were 16 hedge funds in our database with CDXS holdings at the end of June. Our calculations also showed that CDXS isn’t among the 30 most popular stocks among hedge funds (click for Q2 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 let’s take a peek at the latest hedge fund action surrounding Codexis, Inc. (NASDAQ:CDXS).
Wil Harkey of Nantahala Capital Management
Do Hedge Funds Think CDXS Is A Good Stock To Buy Now?
At third quarter’s end, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 31% from the previous quarter. On the other hand, there were a total of 13 hedge funds with a bullish position in CDXS a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Codexis, Inc. (NASDAQ:CDXS) was held by ARK Investment Management, which reported holding $135.7 million worth of stock at the end of September. It was followed by Casdin Capital with a $100.7 million position. Other investors bullish on the company included Nantahala Capital Management, Opaleye Management, and Pura Vida Investments. In terms of the portfolio weights assigned to each position Opaleye Management allocated the biggest weight to Codexis, Inc. (NASDAQ:CDXS), around 5.84% of its 13F portfolio. Nantahala Capital Management is also relatively very bullish on the stock, earmarking 2.75 percent of its 13F equity portfolio to CDXS.
As industrywide interest jumped, key money managers have jumped into Codexis, Inc. (NASDAQ:CDXS) headfirst. Roubaix Capital, managed by Christopher Hillary, established the most valuable position in Codexis, Inc. (NASDAQ:CDXS). Roubaix Capital had $1.6 million invested in the company at the end of the quarter. Mika Toikka’s AlphaCrest Capital Management also made a $1 million investment in the stock during the quarter. The following funds were also among the new CDXS investors: Ryan Tolkin (CIO)’s Schonfeld Strategic Advisors, Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, and Michael Gelband’s ExodusPoint Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Codexis, Inc. (NASDAQ:CDXS) but similarly valued. These stocks are Avanos Medical, Inc. (NYSE:AVNS), Formula Systems (1985) Ltd. (NASDAQ:FORTY), Centessa Pharmaceuticals Limited (NASDAQ:CNTA), SiriusPoint Ltd. (NYSE:SPNT), Youdao, Inc. (NYSE:DAO), Meritor Inc (NYSE:MTOR), and Stride, Inc. (NYSE:LRN). This group of stocks’ market values resemble CDXS’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AVNS | 21 | 238436 | 5 |
| FORTY | 1 | 310 | 1 |
| CNTA | 13 | 212945 | 13 |
| SPNT | 12 | 20559 | 0 |
| DAO | 5 | 176814 | 0 |
| MTOR | 20 | 123529 | 2 |
| LRN | 21 | 145360 | 0 |
| Average | 13.3 | 131136 | 3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.3 hedge funds with bullish positions and the average amount invested in these stocks was $131 million. That figure was $414 million in CDXS’s case. Avanos Medical, Inc. (NYSE:AVNS) is the most popular stock in this table. On the other hand Formula Systems (1985) Ltd. (NASDAQ:FORTY) is the least popular one with only 1 bullish hedge fund positions. Codexis, Inc. (NASDAQ:CDXS) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CDXS is 90. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Hedge funds were also right about betting on CDXS as the stock returned 34.4% since the end of Q3 (through 12/31) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
Follow Codexis Inc. (NASDAQ:CDXS)
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Disclosure: None. This article was originally published at Insider Monkey.
