In this article we will take a look at whether hedge funds think ChromaDex Corporation (NASDAQ:CDXC) 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.
ChromaDex Corporation (NASDAQ:CDXC) has seen an increase in enthusiasm from smart money lately. CDXC was in 3 hedge funds’ portfolios at the end of the first quarter of 2020. There were 1 hedge funds in our database with CDXC positions at the end of the previous quarter. Our calculations also showed that CDXC isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the eyes of most investors, hedge funds are perceived as slow, outdated investment tools of the past. While there are over 8000 funds trading today, We hone in on the leaders of this club, about 850 funds. These hedge fund managers orchestrate bulk of all hedge funds’ total asset base, and by following their finest picks, Insider Monkey has deciphered numerous investment strategies that have historically outpaced the broader indices. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Roger Ibbotson of Zebra Capital Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind let’s check out the new hedge fund action regarding ChromaDex Corporation (NASDAQ:CDXC).
Hedge fund activity in ChromaDex Corporation (NASDAQ:CDXC)
Heading into the second quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 200% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CDXC over the last 18 quarters. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were boosting their holdings considerably (or already accumulated large positions).
The largest stake in ChromaDex Corporation (NASDAQ:CDXC) was held by Citadel Investment Group, which reported holding $0.2 million worth of stock at the end of September. It was followed by Algert Coldiron Investors with a $0.1 million position. The only other hedge fund that is bullish on the company was Zebra Capital Management.
As industrywide interest jumped, some big names have been driving this bullishness. Citadel Investment Group, managed by Ken Griffin, created the largest position in ChromaDex Corporation (NASDAQ:CDXC). Citadel Investment Group had $0.2 million invested in the company at the end of the quarter. Peter Algert and Kevin Coldiron’s Algert Coldiron Investors also made a $0.1 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 ChromaDex Corporation (NASDAQ:CDXC) but similarly valued. These stocks are Akoustis Technologies, Inc. (NASDAQ:AKTS), Gannett Co., Inc. (NYSE:GCI), Protective Insurance Corporation (NASDAQ:PTVCB), and Contango Oil & Gas Company (NYSE:MCF). All of these stocks’ market caps are closest to CDXC’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| AKTS | 3 | 7621 | -3 |
| GCI | 13 | 30106 | -9 |
| PTVCB | 5 | 12042 | -3 |
| MCF | 6 | 4195 | -2 |
| Average | 6.75 | 13491 | -4.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 6.75 hedge funds with bullish positions and the average amount invested in these stocks was $13 million. That figure was $0 million in CDXC’s case. Gannett Co., Inc. (NYSE:GCI) is the most popular stock in this table. On the other hand Akoustis Technologies, Inc. (NASDAQ:AKTS) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks ChromaDex Corporation (NASDAQ:CDXC) is even less popular than AKTS. Hedge funds clearly dropped the ball on CDXC as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 7.9% in 2020 through May 22nd and still beat the market by 15.6 percentage points. A small number of hedge funds were also right about betting on CDXC as the stock returned 48.8% so far in the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.
