How Did Hedge Funds’ Moderna, Inc. (MRNA) Bets Fare?

We know that hedge funds generate strong, risk-adjusted returns over the long run, which is why imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, professional investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do. However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, let’s examine the smart money sentiment towards Moderna, Inc. (NASDAQ:MRNA) and determine whether hedge funds skillfully traded this stock.

Moderna, Inc. (NASDAQ:MRNA) was in 49 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 41. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. MRNA investors should pay attention to an increase in enthusiasm from smart money recently. There were 37 hedge funds in our database with MRNA holdings at the end of June. Our calculations also showed that MRNA isn’t among the 30 most popular stocks among hedge funds (click for Q3 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. Now let’s take a glance at the recent hedge fund action surrounding Moderna, Inc. (NASDAQ:MRNA).

Ken Heebner of Capital Growth Management

Do Hedge Funds Think MRNA Is A Good Stock To Buy Now?

At third quarter’s end, a total of 49 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 32% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards MRNA over the last 25 quarters. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of key hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Among these funds, Coatue Management held the most valuable stake in Moderna, Inc. (NASDAQ:MRNA), which was worth $2328 million at the end of the third quarter. On the second spot was Theleme Partners which amassed $1522.9 million worth of shares. Lone Pine Capital, Citadel Investment Group, and Renaissance Technologies were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Theleme Partners allocated the biggest weight to Moderna, Inc. (NASDAQ:MRNA), around 43.47% of its 13F portfolio. Coatue Management is also relatively very bullish on the stock, dishing out 9.47 percent of its 13F equity portfolio to MRNA.

As industrywide interest jumped, key money managers were leading the bulls’ herd. Arrowstreet Capital, managed by Peter Rathjens, Bruce Clarke and John Campbell, established the most outsized position in Moderna, Inc. (NASDAQ:MRNA). Arrowstreet Capital had $159.6 million invested in the company at the end of the quarter. Phill Gross and Robert Atchinson’s Adage Capital Management also made a $125.9 million investment in the stock during the quarter. The other funds with brand new MRNA positions are Louis Bacon’s Moore Global Investments, Ken Heebner’s Capital Growth Management, and McKinley Capital Management.

Let’s now review hedge fund activity in other stocks similar to Moderna, Inc. (NASDAQ:MRNA). These stocks are NextEra Energy, Inc. (NYSE:NEE), Linde plc (NYSE:LIN), Charter Communications, Inc. (NASDAQ:CHTR), Philip Morris International Inc. (NYSE:PM), Intuit Inc. (NASDAQ:INTU), Honeywell International Inc. (NYSE:HON), and QUALCOMM, Incorporated (NASDAQ:QCOM). This group of stocks’ market values resemble MRNA’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 57.1 hedge funds with bullish positions and the average amount invested in these stocks was $6066 million. That figure was $7315 million in MRNA’s case. Charter Communications, Inc. (NASDAQ:CHTR) is the most popular stock in this table. On the other hand Honeywell International Inc. (NYSE:HON) is the least popular one with only 45 bullish hedge fund positions. Moderna, Inc. (NASDAQ:MRNA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MRNA is 46.9. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 surpassed the market again by 3.6 percentage points. Unfortunately, MRNA wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); MRNA investors were disappointed as the stock returned -56% since the end of September (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.