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 900 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 Kodiak Sciences Inc (NASDAQ:KOD), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Kodiak Sciences Inc (NASDAQ:KOD) has seen a decrease in enthusiasm from smart money in recent months. Kodiak Sciences Inc (NASDAQ:KOD) was in 17 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 20. There were 20 hedge funds in our database with KOD positions at the end of the fourth quarter. Our calculations also showed that KOD isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Lei Zhang of Hillhouse Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, pet market is growing at a 7% annual rate and is expected to reach $110 billion in 2021. So, we are checking out the 5 best stocks for animal lovers. We go through lists like the 15 best Jim Cramer stocks to identify the next Tesla that will deliver outsized returns. 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 go over the new hedge fund action encompassing Kodiak Sciences Inc (NASDAQ:KOD).
Do Hedge Funds Think KOD Is A Good Stock To Buy Now?
At first quarter’s end, a total of 17 of the hedge funds tracked by Insider Monkey were long this stock, a change of -15% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards KOD over the last 23 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
When looking at the institutional investors followed by Insider Monkey, Baker Bros. Advisors, managed by Julian Baker and Felix Baker, holds the most valuable position in Kodiak Sciences Inc (NASDAQ:KOD). Baker Bros. Advisors has a $1.5738 billion position in the stock, comprising 6.8% of its 13F portfolio. The second most bullish fund manager is Hillhouse Capital Management, managed by Lei Zhang, which holds a $100.8 million position; 1% of its 13F portfolio is allocated to the stock. Other hedge funds and institutional investors with similar optimism consist of Joseph Edelman’s Perceptive Advisors, Bob Peck and Andy Raab’s FPR Partners and John Osterweis’s Osterweis Capital Management. In terms of the portfolio weights assigned to each position Baker Bros. Advisors allocated the biggest weight to Kodiak Sciences Inc (NASDAQ:KOD), around 6.82% of its 13F portfolio. FPR Partners is also relatively very bullish on the stock, designating 1.1 percent of its 13F equity portfolio to KOD.
Seeing as Kodiak Sciences Inc (NASDAQ:KOD) has experienced falling interest from the aggregate hedge fund industry, we can see that there exists a select few money managers who sold off their positions entirely heading into Q2. At the top of the heap, James E. Flynn’s Deerfield Management cut the biggest investment of the 750 funds followed by Insider Monkey, totaling close to $29.7 million in stock. Ryan Tolkin (CIO)’s fund, Schonfeld Strategic Advisors, also dropped its stock, about $1 million worth. These transactions are important to note, as aggregate hedge fund interest dropped by 3 funds heading into Q2.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Kodiak Sciences Inc (NASDAQ:KOD) but similarly valued. We will take a look at Pilgrim’s Pride Corporation (NASDAQ:PPC), Corelogic Inc (NYSE:CLGX), Regal Beloit Corporation (NYSE:RBC), Shoals Technologies Group, Inc. (NASDAQ:SHLS), Inspire Medical Systems, Inc. (NYSE:INSP), Amkor Technology, Inc. (NASDAQ:AMKR), and OneConnect Financial Technology Co., Ltd. (NYSE:OCFT). This group of stocks’ market valuations are closest to KOD’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| PPC | 16 | 122066 | -1 |
| CLGX | 49 | 1690451 | 3 |
| RBC | 30 | 358632 | 5 |
| SHLS | 22 | 323958 | 22 |
| INSP | 28 | 431163 | 1 |
| AMKR | 20 | 172121 | -4 |
| OCFT | 10 | 70885 | 5 |
| Average | 25 | 452754 | 4.4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25 hedge funds with bullish positions and the average amount invested in these stocks was $453 million. That figure was $1807 million in KOD’s case. Corelogic Inc (NYSE:CLGX) is the most popular stock in this table. On the other hand OneConnect Financial Technology Co., Ltd. (NYSE:OCFT) is the least popular one with only 10 bullish hedge fund positions. Kodiak Sciences Inc (NASDAQ:KOD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for KOD is 36.5. 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. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.5% in 2021 through July 23rd and surpassed the market again by 10.1 percentage points. Unfortunately KOD wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); KOD investors were disappointed as the stock returned -24.3% since the end of March (through 7/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.
Follow Kodiak Sciences Inc. (NASDAQ:KOD)
Follow Kodiak Sciences Inc. (NASDAQ:KOD)
Suggested Articles:
- 20 Best Ways To Lose Weight
- Top 25 Free Games Without Wifi or Internet
- 15 Most Valuable Weed Companies in the World
Disclosure: None. This article was originally published at Insider Monkey.
