Is VCRA A Good Stock To Buy Now?

The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. What do these smart investors think about Vocera Communications Inc (NYSE:VCRA)?

Is VCRA a good stock to buy now? The best stock pickers were getting more optimistic. The number of long hedge fund positions advanced by 3 recently. Vocera Communications Inc (NYSE:VCRA) was in 18 hedge funds’ portfolios at the end of September. The all time high for this statistic is 17. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that VCRA 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 today’s marketplace there are a large number of tools stock market investors put to use to assess their stock investments. Some of the less known tools are hedge fund and insider trading activity. We have shown that, historically, those who follow the top picks of the top money managers can outperform their index-focused peers by a very impressive amount (see the details here).

Donald Sussman of Paloma Partners

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. Keeping this in mind we’re going to check out the fresh hedge fund action surrounding Vocera Communications Inc (NYSE:VCRA).

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

Heading into the fourth quarter of 2020, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 20% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards VCRA over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Lynrock Lake held the most valuable stake in Vocera Communications Inc (NYSE:VCRA), which was worth $53.6 million at the end of the third quarter. On the second spot was Renaissance Technologies which amassed $25.2 million worth of shares. D E Shaw, No Street Capital, and Millennium 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 Lynrock Lake allocated the biggest weight to Vocera Communications Inc (NYSE:VCRA), around 3.98% of its 13F portfolio. No Street Capital is also relatively very bullish on the stock, setting aside 2.39 percent of its 13F equity portfolio to VCRA.

As aggregate interest increased, key money managers were breaking ground themselves. Millennium Management, managed by Israel Englander, created the most outsized position in Vocera Communications Inc (NYSE:VCRA). Millennium Management had $17.7 million invested in the company at the end of the quarter. Mark Coe’s Intrinsic Edge Capital also initiated a $7.6 million position during the quarter. The other funds with brand new VCRA positions are Dmitry Balyasny’s Balyasny Asset Management and Donald Sussman’s Paloma Partners.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Vocera Communications Inc (NYSE:VCRA) but similarly valued. We will take a look at PetIQ, Inc. (NASDAQ:PETQ), Retrophin Inc (NASDAQ:RTRX), Phathom Pharmaceuticals, Inc. (NASDAQ:PHAT), Theravance Biopharma Inc (NASDAQ:TBPH), Accel Entertainment, Inc. (NYSE:ACEL), Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC), and SecureWorks Corp. (NASDAQ:SCWX). All of these stocks’ market caps are closest to VCRA’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 14.3 hedge funds with bullish positions and the average amount invested in these stocks was $196 million. That figure was $182 million in VCRA’s case. Retrophin Inc (NASDAQ:RTRX) is the most popular stock in this table. On the other hand Phathom Pharmaceuticals, Inc. (NASDAQ:PHAT) is the least popular one with only 6 bullish hedge fund positions. Vocera Communications Inc (NYSE:VCRA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VCRA is 71.3. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on VCRA as the stock returned 19.9% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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