Is Myriad Genetics, Inc. (NASDAQ:MYGN) a good stock to buy right now? We at Insider Monkey like to examine what billionaires and hedge funds think of a company before doing days of research on it. Given their 2 and 20 payment structure, hedge funds have more resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also have numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.
Is Myriad Genetics, Inc. (NASDAQ:MYGN) the right investment to pursue these days? Hedge funds are buying. The number of long hedge fund bets increased by 4 in recent months. Our calculations also showed that MYGN isn’t among the 30 most popular stocks among hedge funds.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that hedge funds’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 18 percentage points since May 2014 through December 3, 2018 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 24% through December 3, 2018. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s analyze the new hedge fund action regarding Myriad Genetics, Inc. (NASDAQ:MYGN).
How have hedgies been trading Myriad Genetics, Inc. (NASDAQ:MYGN)?
Heading into the fourth quarter of 2018, a total of 21 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 24% from one quarter earlier. On the other hand, there were a total of 16 hedge funds with a bullish position in MYGN at the beginning of this year. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
Among these funds, D E Shaw held the most valuable stake in Myriad Genetics, Inc. (NASDAQ:MYGN), which was worth $179.1 million at the end of the third quarter. On the second spot was Consonance Capital Management which amassed $75.7 million worth of shares. Moreover, Millennium Management, Point72 Asset Management, and AQR Capital Management were also bullish on Myriad Genetics, Inc. (NASDAQ:MYGN), allocating a large percentage of their portfolios to this stock.
Now, some big names have jumped into Myriad Genetics, Inc. (NASDAQ:MYGN) headfirst. Consonance Capital Management, managed by Mitchell Blutt, created the most valuable position in Myriad Genetics, Inc. (NASDAQ:MYGN). Consonance Capital Management had $75.7 million invested in the company at the end of the quarter. Dmitry Balyasny’s Balyasny Asset Management also initiated a $1.9 million position during the quarter. The following funds were also among the new MYGN investors: Matthew Hulsizer’s PEAK6 Capital Management, Guy Shahar’s DSAM Partners, and Roger Ibbotson’s Zebra Capital Management.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Myriad Genetics, Inc. (NASDAQ:MYGN) but similarly valued. These stocks are Sodastream International Ltd (NASDAQ:SODA), Verint Systems Inc. (NASDAQ:VRNT), Array Biopharma Inc (NASDAQ:ARRY), and Avanos Medical, Inc. (NYSE:AVNS). All of these stocks’ market caps match MYGN’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| SODA | 24 | 827744 | 8 |
| VRNT | 18 | 319776 | 0 |
| ARRY | 30 | 816377 | -1 |
| AVNS | 17 | 114236 | 1 |
| Average | 22.25 | 519533 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.25 hedge funds with bullish positions and the average amount invested in these stocks was $520 million. That figure was $379 million in MYGN’s case. Array Biopharma Inc (NASDAQ:ARRY) is the most popular stock in this table. On the other hand Avanos Medical, Inc. (NYSE:AVNS) is the least popular one with only 17 bullish hedge fund positions. Myriad Genetics, Inc. (NASDAQ:MYGN) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard ARRY might be a better candidate to consider a long position.
Disclosure: None. This article was originally published at Insider Monkey.
