Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Moderna, Inc. (NASDAQ:MRNA), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is MRNA a good stock to buy? Moderna, Inc. (NASDAQ:MRNA) investors should pay attention to a decrease in activity from the world’s largest hedge funds in recent months. Moderna, Inc. (NASDAQ:MRNA) was in 32 hedge funds’ portfolios at the end of September. The all time high for this statistic is 37. 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 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
John Overdeck of Two Sigma Advisors
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 15 best blue chip stocks to buy to pick the best large-cap stocks to buy. 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. Now let’s view the latest hedge fund action regarding Moderna, Inc. (NASDAQ:MRNA).
Do Hedge Funds Think MRNA Is A Good Stock To Buy Now?
At the end of September, a total of 32 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -14% from the previous quarter. On the other hand, there were a total of 9 hedge funds with a bullish position in MRNA a year ago. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Theleme Partners, managed by Patrick Degorce, holds the most valuable position in Moderna, Inc. (NASDAQ:MRNA). Theleme Partners has a $541.4 million position in the stock, comprising 24.9% of its 13F portfolio. The second most bullish fund manager is Citadel Investment Group, led by Ken Griffin, holding a $117.3 million call position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. Remaining members of the smart money with similar optimism consist of D. E. Shaw’s D E Shaw, Ben Levine, Andrew Manuel and Stefan Renold’s LMR Partners and Charles Clough’s Clough Capital Partners. In terms of the portfolio weights assigned to each position Theleme Partners allocated the biggest weight to Moderna, Inc. (NASDAQ:MRNA), around 24.88% of its 13F portfolio. Clough Capital Partners is also relatively very bullish on the stock, earmarking 1.41 percent of its 13F equity portfolio to MRNA.
Since Moderna, Inc. (NASDAQ:MRNA) has witnessed falling interest from hedge fund managers, it’s safe to say that there exists a select few hedge funds that elected to cut their entire stakes heading into Q4. It’s worth mentioning that Dmitry Balyasny’s Balyasny Asset Management dropped the biggest position of all the hedgies monitored by Insider Monkey, totaling an estimated $30.9 million in stock, and Scott Bessent’s Key Square Capital Management was right behind this move, as the fund sold off about $23.7 million worth. These moves are intriguing to say the least, as total hedge fund interest dropped by 5 funds heading into Q4.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Moderna, Inc. (NASDAQ:MRNA) but similarly valued. We will take a look at Kinder Morgan Inc (NYSE:KMI), Alcon Inc. (NYSE:ALC), Public Service Enterprise Group Incorporated (NYSE:PEG), Wayfair Inc (NYSE:W), Eni SpA (NYSE:E), ING Groep N.V. (NYSE:ING), and Orange SA (NYSE:ORAN). This group of stocks’ market values resemble MRNA’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| KMI | 46 | 939696 | -4 |
| ALC | 26 | 676140 | 5 |
| PEG | 23 | 406385 | -8 |
| W | 40 | 4956036 | -1 |
| E | 5 | 21869 | -3 |
| ING | 9 | 279146 | -4 |
| ORAN | 4 | 5851 | 1 |
| Average | 21.9 | 1040732 | -2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 21.9 hedge funds with bullish positions and the average amount invested in these stocks was $1041 million. That figure was $690 million in MRNA’s case. Kinder Morgan Inc (NYSE:KMI) is the most popular stock in this table. On the other hand Orange SA (NYSE:ORAN) is the least popular one with only 4 bullish hedge fund positions. Moderna, Inc. (NASDAQ:MRNA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MRNA is 59.3. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 33.3% in 2020 through December 18th and still beat the market by 16.4 percentage points. Hedge funds were also right about betting on MRNA as the stock returned 98.2% since the end of Q3 (through 12/18) 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.
