The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Veracyte Inc (NASDAQ:VCYT).
Is Veracyte Inc (NASDAQ:VCYT) a buy right now? The best stock pickers are reducing their bets on the stock. The number of long hedge fund positions fell by 6 in recent months. Our calculations also showed that VCYT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). VCYT was in 18 hedge funds’ portfolios at the end of the third quarter of 2019. There were 24 hedge funds in our database with VCYT positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most traders, hedge funds are assumed to be slow, outdated financial vehicles of yesteryear. While there are over 8000 funds with their doors open today, Our experts choose to focus on the top tier of this club, approximately 750 funds. These hedge fund managers have their hands on the majority of all hedge funds’ total capital, and by tailing their top investments, Insider Monkey has unearthed several investment strategies that have historically beaten Mr. Market. Insider Monkey’s flagship short hedge fund strategy outperformed 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 .
John Overdeck of Two Sigma Advisors
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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 also rely on the best performing hedge funds‘ buy/sell signals. We’re going to go over the recent hedge fund action surrounding Veracyte Inc (NASDAQ:VCYT).
How are hedge funds trading Veracyte Inc (NASDAQ:VCYT)?
At Q3’s end, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -25% from the second quarter of 2019. Below, you can check out the change in hedge fund sentiment towards VCYT over the last 17 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Farallon Capital holds the largest position in Veracyte Inc (NASDAQ:VCYT). Farallon Capital has a $24 million position in the stock, comprising 0.2% of its 13F portfolio. The second most bullish fund manager is John Overdeck and David Siegel of Two Sigma Advisors, with a $9.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Some other peers that hold long positions comprise J. Carlo Cannell’s Cannell Capital, Richard Driehaus’s Driehaus Capital and Israel Englander’s Millennium Management. In terms of the portfolio weights assigned to each position Cannell Capital allocated the biggest weight to Veracyte Inc (NASDAQ:VCYT), around 3.02% of its 13F portfolio. Atika Capital is also relatively very bullish on the stock, dishing out 0.73 percent of its 13F equity portfolio to VCYT.
Due to the fact that Veracyte Inc (NASDAQ:VCYT) has witnessed falling interest from the smart money, logic holds that there lies a certain “tier” of fund managers who sold off their full holdings heading into Q4. At the top of the heap, Steve Cohen’s Point72 Asset Management dropped the biggest investment of the 750 funds tracked by Insider Monkey, valued at close to $7.5 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace, also cut its stock, about $6.7 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest dropped by 6 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Veracyte Inc (NASDAQ:VCYT) but similarly valued. These stocks are Southside Bancshares, Inc. (NASDAQ:SBSI), STAAR Surgical Company (NASDAQ:STAA), Triumph Group Inc (NYSE:TGI), and World Acceptance Corporation (NASDAQ:WRLD). This group of stocks’ market valuations are similar to VCYT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SBSI | 7 | 56884 | 0 |
| STAA | 13 | 457044 | -3 |
| TGI | 13 | 63919 | 1 |
| WRLD | 14 | 167479 | 3 |
| Average | 11.75 | 186332 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.75 hedge funds with bullish positions and the average amount invested in these stocks was $186 million. That figure was $103 million in VCYT’s case. World Acceptance Corporation (NASDAQ:WRLD) is the most popular stock in this table. On the other hand Southside Bancshares, Inc. (NASDAQ:SBSI) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Veracyte Inc (NASDAQ:VCYT) 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 VCYT as the stock returned 19.7% 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.
