Here is What Hedge Funds Have To Say About USANA Health Sciences, Inc. (USNA)

We have been waiting for this for a year and finally the third quarter ended up showing a nice bump in the performance of small-cap stocks. Both the S&P 500 and Russell 2000 were up since the end of the second quarter, but small-cap stocks outperformed the large-cap stocks by double digits. This is important for hedge funds, which are big supporters of small-cap stocks, because their investors started pulling some of their capital out due to poor recent performance. It is very likely that equity hedge funds will deliver better risk adjusted returns in the second half of this year. In this article we are going to look at how this recent market trend affected the sentiment of hedge funds towards USANA Health Sciences, Inc. (NYSE:USNA), and what that likely means for the prospects of the company and its stock.

USANA Health Sciences, Inc. (NYSE:USNA) investors should pay attention to an increase in hedge fund sentiment of late. 14 hedge funds that we track owned the stock on September 30. There were 13 hedge funds in our database with USNA positions at the end of the June quarter. At the end of this article we will also compare USNA to other stocks including Portola Pharmaceuticals Inc (NASDAQ:PTLA), Actuant Corporation (NYSE:ATU), and The E.W. Scripps Company (NYSE:SSP) to get a better sense of its popularity.

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What have hedge funds been doing with USANA Health Sciences, Inc. (NYSE:USNA)?

At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were bullish on this stock, an 8% increase from the second quarter of 2016. By comparison, 14 hedge funds also held shares or bullish call options in USNA heading into this year, with hedge fund sentiment being flat throughout the first nine months of 2016. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Renaissance Technologies, founded by Jim Simons, holds the number one position in USANA Health Sciences, Inc. (NYSE:USNA). Renaissance Technologies has a $110.6 million position in the stock. The second largest stake is held by Millennium Management, led by Israel Englander, which holds a $7.7 million position. Other members of the smart money with similar optimism contain Cliff Asness’ AQR Capital Management, David E. Shaw’s D E Shaw, and Paul Marshall and Ian Wace’s Marshall Wace LLP. We should note that none of these hedge funds are 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 one would reasonably expect, specific money managers were leading the bulls’ herd. Marshall Wace LLP created the most valuable position in USANA Health Sciences, Inc. (NYSE:USNA). Marshall Wace LLP had $4 million invested in the company at the end of the quarter. Paul Tudor Jones’ Tudor Investment Corp also made a $0.4 million investment in the stock during the quarter.

Let’s go over hedge fund activity in other stocks similar to USANA Health Sciences, Inc. (NYSE:USNA). These stocks are Portola Pharmaceuticals Inc (NASDAQ:PTLA), Actuant Corporation (NYSE:ATU), The E.W. Scripps Company (NYSE:SSP), and Apogee Enterprises, Inc. (NASDAQ:APOG). This group of stocks’ market values are closest to USNA’s market value.

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 $183 million. That figure was $142 million in USNA’s case. Actuant Corporation (NYSE:ATU) is the most popular stock in this table. On the other hand The E.W. Scripps Company (NYSE:SSP) is the least popular one with only 10 bullish hedge fund positions. USANA Health Sciences, Inc. (NYSE:USNA) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ATU might be a better candidate to consider taking a long position in.

Disclosure: None