Is EXEL Stock A Buy or Sell?

Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Exelixis, Inc. (NASDAQ:EXEL).

Is EXEL stock a buy? Exelixis, Inc. (NASDAQ:EXEL) was in 24 hedge funds’ portfolios at the end of December. The all time high for this statistic is 39. EXEL has seen a decrease in hedge fund sentiment of late. There were 34 hedge funds in our database with EXEL positions at the end of the third quarter. Our calculations also showed that EXEL isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.

Steven Cohen of Point72 Asset Management

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Keeping this in mind we’re going to check out the new hedge fund action regarding Exelixis, Inc. (NASDAQ:EXEL).

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

At the end of December, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -29% from the third quarter of 2020. On the other hand, there were a total of 23 hedge funds with a bullish position in EXEL a year ago. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).

Among these funds, Renaissance Technologies held the most valuable stake in Exelixis, Inc. (NASDAQ:EXEL), which was worth $435.2 million at the end of the fourth quarter. On the second spot was Farallon Capital which amassed $220.8 million worth of shares. Point72 Asset Management, Polar Capital, and Sectoral Asset Management 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 Sectoral Asset Management allocated the biggest weight to Exelixis, Inc. (NASDAQ:EXEL), around 2.55% of its 13F portfolio. Great Point Partners is also relatively very bullish on the stock, earmarking 1.55 percent of its 13F equity portfolio to EXEL.

Judging by the fact that Exelixis, Inc. (NASDAQ:EXEL) has experienced a decline in interest from the aggregate hedge fund industry, we can see that there is a sect of funds that slashed their positions entirely by the end of the fourth quarter. Intriguingly, OrbiMed Advisors sold off the biggest investment of the “upper crust” of funds watched by Insider Monkey, comprising an estimated $58.8 million in stock, and Louis Bacon’s Moore Global Investments was right behind this move, as the fund cut about $6.7 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest dropped by 10 funds by the end of the fourth quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Exelixis, Inc. (NASDAQ:EXEL) but similarly valued. These stocks are Tetra Tech, Inc. (NASDAQ:TTEK), Littelfuse, Inc. (NASDAQ:LFUS), AppFolio Inc (NASDAQ:APPF), Pure Storage, Inc. (NYSE:PSTG), Stitch Fix, Inc. (NASDAQ:SFIX), Clearway Energy, Inc. (NYSE:CWEN), and AutoNation, Inc. (NYSE:AN). All of these stocks’ market caps match EXEL’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 23.9 hedge funds with bullish positions and the average amount invested in these stocks was $536 million. That figure was $918 million in EXEL’s case. Stitch Fix, Inc. (NASDAQ:SFIX) is the most popular stock in this table. On the other hand AppFolio Inc (NASDAQ:APPF) is the least popular one with only 19 bullish hedge fund positions. Exelixis, Inc. (NASDAQ:EXEL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for EXEL is 32.7. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Hedge funds were also right about betting on EXEL as the stock returned 18.3% since the end of Q4 (through 4/19) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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