Is Vaxart, Inc. (VXRT) A Good Stock To Buy?

While the market driven by short-term sentiment influenced by the accommodative interest rate environment in the US, virus news and stimulus spending, many smart money investors are starting to get cautious towards the current bull run since March, 2020 and hedging or reducing many of their long positions. Some fund managers are betting on Dow hitting 40,000 to generate strong returns. However, as we know, big investors usually buy stocks with strong fundamentals that can deliver gains both in bull and bear markets, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Vaxart, Inc. (NASDAQ:VXRT).

Is VXRT a good stock to buy? Vaxart, Inc. (NASDAQ:VXRT) investors should be aware of a decrease in support from the world’s most elite money managers lately. Vaxart, Inc. (NASDAQ:VXRT) was in 6 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 12. There were 9 hedge funds in our database with VXRT positions at the end of the fourth quarter. Our calculations also showed that VXRT isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

In the eyes of most market participants, hedge funds are assumed to be unimportant, outdated financial tools of yesteryear. While there are more than 8000 funds trading today, We hone in on the masters of this club, approximately 850 funds. These money managers direct the lion’s share of all hedge funds’ total asset base, and by following their best stock picks, Insider Monkey has identified a few investment strategies that have historically outpaced the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points annually since its inception in March 2017. Also, our monthly newsletter’s portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Israel Englander of Millennium Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we’re going to take a look at the new hedge fund action encompassing Vaxart, Inc. (NASDAQ:VXRT).

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

Heading into the second quarter of 2021, a total of 6 of the hedge funds tracked by Insider Monkey were long this stock, a change of -33% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards VXRT over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Citadel Investment Group was the largest shareholder of Vaxart, Inc. (NASDAQ:VXRT), with a stake worth $3.1 million reported as of the end of March. Trailing Citadel Investment Group was Citadel Investment Group, which amassed a stake valued at $3 million. Pura Vida Investments, Millennium Management, and Bailard Inc 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 Pura Vida Investments allocated the biggest weight to Vaxart, Inc. (NASDAQ:VXRT), around 0.07% of its 13F portfolio. HighVista Strategies is also relatively very bullish on the stock, designating 0.05 percent of its 13F equity portfolio to VXRT.

Judging by the fact that Vaxart, Inc. (NASDAQ:VXRT) has witnessed a decline in interest from the aggregate hedge fund industry, it’s easy to see that there exists a select few hedgies who sold off their full holdings last quarter. Interestingly, Peter Kolchinsky’s RA Capital Management cut the biggest stake of the 750 funds watched by Insider Monkey, totaling an estimated $15.7 million in stock. Julian Baker and Felix Baker’s fund, Baker Bros. Advisors, also cut its stock, about $8 million worth. These moves are intriguing to say the least, as aggregate hedge fund interest was cut by 3 funds last quarter.

Let’s now review hedge fund activity in other stocks similar to Vaxart, Inc. (NASDAQ:VXRT). These stocks are Hawkins, Inc. (NASDAQ:HWKN), Golden Entertainment Inc (NASDAQ:GDEN), Gladstone Commercial Corporation (NASDAQ:GOOD), TrustCo Bank Corp NY (NASDAQ:TRST), Ducommun Incorporated (NYSE:DCO), SpartanNash Company (NASDAQ:SPTN), and Universal Logistics Holdings, Inc. (NASDAQ:ULH). This group of stocks’ market caps are similar to VXRT’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.4 hedge funds with bullish positions and the average amount invested in these stocks was $54 million. That figure was $6 million in VXRT’s case. Golden Entertainment Inc (NASDAQ:GDEN) is the most popular stock in this table. On the other hand Gladstone Commercial Corporation (NASDAQ:GOOD) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Vaxart, Inc. (NASDAQ:VXRT) is even less popular than GOOD. Our overall hedge fund sentiment score for VXRT is 17. 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. Hedge funds clearly dropped the ball on VXRT as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. A small number of hedge funds were also right about betting on VXRT as the stock returned 41.2% since Q1 (through June 25th) and outperformed the market by an even larger margin.

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