Based on the fact that hedge funds have collectively under-performed the market for several years, it would be easy to assume that their stock picks simply aren’t very good. However, our research shows this not to be the case. In fact, when it comes to their very top picks collectively, they show a strong ability to pick winning stocks. Between November 1, 2014 and October 30 of this year, less than 49% of the stocks in the S&P 500 beat the market. However, hedge funds’ top 30 stock picks from the index had a much higher success rate than this, at 63%. The returns from these 30 stocks also easily bested the broader market, at 9.5% compared to 5.2%, despite there being a few duds in there like Micron and Anadarko (even their collective wisdom isn’t perfect). The results show that there is plenty of merit to imitating the collective wisdom of top investors.
Accuray Incorporated (NASDAQ:ARAY) was in 20 hedge funds’ portfolios at the end of September. ARAY investors should pay attention to an increase in support from the world’s most elite money managers lately. There were 19 hedge funds in our database with ARAY positions at the end of the previous quarter. At the end of this article we will also compare ARAY to other stocks including Carriage Services, Inc. (NYSE:CSV), Five Prime Therapeutics Inc (NASDAQ:FPRX), and TravelCenters of America LLC (NYSE:TA) to get a better sense of its popularity.
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Now, we’re going to take a look at the latest action regarding Accuray Incorporated (NASDAQ:ARAY).
What does the smart money think about Accuray Incorporated (NASDAQ:ARAY)?
At Q3’s end, a total of 20 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 5% from one quarter earlier. With hedge funds’ positions undergoing their usual ebb and flow, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes substantially (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Partner Fund Management, managed by Christopher James, holds the biggest position in Accuray Incorporated (NASDAQ:ARAY). Partner Fund Management has a $28.8 million position in the stock, comprising 0.8% of its 13F portfolio. The second most bullish fund manager is Royce & Associates, led by Chuck Royce, holding a $10.8 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other peers that hold long positions include Jim Simons’s Renaissance Technologies, D E Shaw and Philip Hempleman’s Ardsley Partners.
As industrywide interest jumped, key money managers have jumped into Accuray Incorporated (NASDAQ:ARAY) headfirst. Point72 Asset Management, managed by Steve Cohen, established the most valuable position in Accuray Incorporated (NASDAQ:ARAY). Point72 Asset Management had $7.9 million invested in the company at the end of the quarter. Mike Vranos’s Ellington also made a $0.2 million investment in the stock during the quarter. The following funds were also among the new ARAY investors: Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital and Matthew Tewksbury’s Stevens Capital Management.
Let’s also examine hedge fund activity in other stocks similar to Accuray Incorporated (NASDAQ:ARAY). We will take a look at Carriage Services, Inc. (NYSE:CSV), Five Prime Therapeutics Inc (NASDAQ:FPRX), TravelCenters of America LLC (NYSE:TA), and DICE HOLDINGS, INC. (NYSE:DHX). This group of stocks’ market caps match ARAY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CSV | 11 | 25973 | -2 |
| FPRX | 20 | 119550 | 3 |
| TA | 16 | 44852 | 1 |
| DHX | 16 | 25083 | 0 |
As you can see these stocks had an average of 15.75 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $94 million in ARAY’s case. Five Prime Therapeutics Inc (NASDAQ:FPRX) is the most popular stock in this table. On the other hand Carriage Services, Inc. (NYSE:CSV) is the least popular one with only 11 bullish hedge fund positions. Accuray Incorporated (NASDAQ:ARAY) is among the most popular stocks in the group and that, in combination with the total number of hedge funds long the stock increasing, makes it worth a closer look.
