Between June 25 and October 30 the Russell 2000 ETF (IWM) lagged the larger S&P 500 ETF (SPY) by more than 14 percentage points as investors worried over the possible ramifications of rising interest rates. The hedge funds and institutional investors we track typically invest more in smaller-cap stocks than an average investor, and we have seen data that shows those funds paring back their overall exposure. Those funds cutting positions in small-caps is one reason why volatility has increased. In the following paragraphs, we take a closer look at what hedge funds and prominent investors think of InVitae Corp (NYSE:NVTA) and see how the stock is affected by the recent hedge fund activity.
InVitae Corp (NYSE:NVTA) has experienced a decrease in hedge fund sentiment in recent months. At the end of this article we will also compare NVTA to other stocks, including Garrison Capital Inc (NASDAQ:GARS), Heritage-Crystal Clean, Inc. (NASDAQ:HCCI), and Proteon Therapeutics Inc (NASDAQ:PRTO) to get a better sense of its popularity.
Follow Invitae Corp (NYSE:NVTA)
Follow Invitae Corp (NYSE:NVTA)
In the 21st century investor’s toolkit there are tons of indicators investors employ to grade stocks. A pair of the best indicators are hedge fund and insider trading interest. Our experts have shown that, historically, those who follow the best picks of the top fund managers can trounce the market by a healthy amount (see the details here).
Keeping this in mind, we’re going to take a peek at the new action regarding InVitae Corp (NYSE:NVTA).
How have hedgies been trading InVitae Corp (NYSE:NVTA)?
At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -18% from one quarter earlier. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were upping their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Baker Bros. Advisors, managed by Julian Baker and Felix Baker, holds the largest position in InVitae Corp (NYSE:NVTA). Baker Bros. Advisors has an $47.3 million position in the stock, comprising 0.4% of its 13F portfolio. Sitting at the No. 2 spot is Stephen DuBois of Camber Capital Management, with an $6.5 million position; the fund has 0.6% of its 13F portfolio invested in the stock. Some other professional money managers that are bullish include Jeremy Green’s Redmile Group, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management and Samuel Isaly’s OrbiMed Advisors.
Seeing as InVitae Corp (NYSE:NVTA) has experienced a bearish sentiment from the smart money, it’s safe to say that there was a specific group of hedgies that slashed their entire stakes by the end of the third quarter. At the top of the heap, Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management cut the biggest investment of all the hedgies watched by Insider Monkey, valued at close to $13.8 million in stock. Peter Muller’s fund, PDT Partners, also sold off its stock, about $0.2 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 2 funds by the end of the third quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as InVitae Corp (NYSE:NVTA) but similarly valued. We will take a look at Garrison Capital Inc (NASDAQ:GARS), Heritage-Crystal Clean, Inc. (NASDAQ:HCCI), Proteon Therapeutics Inc (NASDAQ:PRTO), and Hawaiian Telcom HoldCo Inc (NASDAQ:HCOM). This group of stocks’ market valuations are similar to NVTA’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| GARS | 5 | 2835 | -1 |
| HCCI | 4 | 34482 | 0 |
| PRTO | 4 | 46207 | 0 |
| HCOM | 8 | 25759 | 1 |
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $27 million, compared to $72 million in NVTA’s case. Hawaiian Telcom HoldCo Inc (NASDAQ:HCOM) is the most popular stock in this table, while Heritage-Crystal Clean, Inc. (NASDAQ:HCCI) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks, InVitae Corp (NYSE:NVTA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.