In this article we will take a look at whether hedge funds think Calyxt, Inc. (NASDAQ:CLXT) 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.
Calyxt, Inc. (NASDAQ:CLXT) shares haven’t seen a lot of action during the first quarter. Overall, hedge fund sentiment was unchanged. The stock was in 4 hedge funds’ portfolios at the end of the first quarter of 2020. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as BioSig Technologies, Inc. (NASDAQ:BSGM), iBio, Inc. (NYSE:IBIO), and Mesa Air Group, Inc. (NASDAQ:MESA) to gather more data points. Our calculations also showed that CLXT 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 51 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
David E. Shaw of D.E. Shaw
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. 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 the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let’s check out the fresh hedge fund action surrounding Calyxt, Inc. (NASDAQ:CLXT).
How have hedgies been trading Calyxt, Inc. (NASDAQ:CLXT)?
At the end of the first quarter, a total of 4 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CLXT over the last 18 quarters. With hedge funds’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Columbus Hill Capital Management, managed by Kevin D. Eng, holds the number one position in Calyxt, Inc. (NASDAQ:CLXT). Columbus Hill Capital Management has a $1.7 million position in the stock, comprising 0.3% of its 13F portfolio. Coming in second is Renaissance Technologies, which holds a $0.2 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish encompass D. E. Shaw’s D E Shaw, Ken Griffin’s Citadel Investment Group and . In terms of the portfolio weights assigned to each position Columbus Hill Capital Management allocated the biggest weight to Calyxt, Inc. (NASDAQ:CLXT), around 0.32% of its 13F portfolio. D E Shaw is also relatively very bullish on the stock, setting aside 0.0003 percent of its 13F equity portfolio to CLXT.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s now review hedge fund activity in other stocks similar to Calyxt, Inc. (NASDAQ:CLXT). We will take a look at BioSig Technologies, Inc. (NASDAQ:BSGM), iBio, Inc. (NYSE:IBIO), Mesa Air Group, Inc. (NASDAQ:MESA), and United Security Bancshares (NASDAQ:UBFO). This group of stocks’ market caps are similar to CLXT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BSGM | 1 | 75 | -1 |
| IBIO | 3 | 176 | 1 |
| MESA | 10 | 25375 | -4 |
| UBFO | 3 | 1992 | -2 |
| Average | 4.25 | 6905 | -1.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 4.25 hedge funds with bullish positions and the average amount invested in these stocks was $7 million. That figure was $2 million in CLXT’s case. Mesa Air Group, Inc. (NASDAQ:MESA) is the most popular stock in this table. On the other hand BioSig Technologies, Inc. (NASDAQ:BSGM) is the least popular one with only 1 bullish hedge fund positions. Calyxt, Inc. (NASDAQ:CLXT) is not the least popular stock in this group but hedge fund interest is still below average. 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 8.3% in 2020 through the end of May and still beat the market by 13.2 percentage points. A small number of hedge funds were also right about betting on CLXT as the stock returned 30.3% during the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
