We at Insider Monkey have gone over 700 13F filings that hedge funds and prominent investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of December 31st. In this article we look at what those investors think of Genomic Health, Inc. (NASDAQ:GHDX).
Is Genomic Health, Inc. (NASDAQ:GHDX) ready to rally soon? The smart money is turning bullish. The number of bullish hedge fund bets advanced by 6 in recent months. Our calculations also showed that GHDX isn’t among the 30 most popular stocks among hedge funds.
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 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
We’re going to take a look at the recent hedge fund action encompassing Genomic Health, Inc. (NASDAQ:GHDX).
Hedge fund activity in Genomic Health, Inc. (NASDAQ:GHDX)
At the end of the fourth quarter, a total of 24 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 33% from the previous quarter. The graph below displays the number of hedge funds with bullish position in GHDX over the last 14 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Baker Bros. Advisors was the largest shareholder of Genomic Health, Inc. (NASDAQ:GHDX), with a stake worth $756.4 million reported as of the end of September. Trailing Baker Bros. Advisors was Renaissance Technologies, which amassed a stake valued at $125.4 million. Millennium Management, AQR Capital Management, and GLG Partners were also very fond of the stock, giving the stock large weights in their portfolios.
As industrywide interest jumped, some big names were breaking ground themselves. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most valuable position in Genomic Health, Inc. (NASDAQ:GHDX). Arrowstreet Capital had $2.3 million invested in the company at the end of the quarter. Kamran Moghtaderi’s Eversept Partners also made a $1.5 million investment in the stock during the quarter. The other funds with brand new GHDX positions are Dmitry Balyasny’s Balyasny Asset Management, Roger Ibbotson’s Zebra Capital Management, and Minhua Zhang’s Weld Capital Management.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Genomic Health, Inc. (NASDAQ:GHDX) but similarly valued. We will take a look at CNX Resources Corporation (NYSE:CNX), First Financial Bancorp (NASDAQ:FFBC), iRobot Corporation (NASDAQ:IRBT), and BBVA Banco Frances S.A. (NYSE:BFR). This group of stocks’ market values resemble GHDX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CNX | 23 | 747911 | 0 |
| FFBC | 6 | 17474 | -1 |
| IRBT | 14 | 79814 | 4 |
| BFR | 13 | 30134 | 6 |
| Average | 14 | 218833 | 2.25 |
View table here if you experience formatting issues.
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 $219 million. That figure was $1023 million in GHDX’s case. CNX Resources Corporation (NYSE:CNX) is the most popular stock in this table. On the other hand First Financial Bancorp (NASDAQ:FFBC) is the least popular one with only 6 bullish hedge fund positions. Compared to these stocks Genomic Health, Inc. (NASDAQ:GHDX) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately GHDX wasn’t nearly as popular as these 15 stock and hedge funds that were betting on GHDX were disappointed as the stock returned -1.4% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
