We know that hedge funds generate strong, risk-adjusted returns over the long run, therefore imitating the picks that they are collectively bullish on can be a profitable strategy for retail investors. With billions of dollars in assets, smart money investors have to conduct complex analyses, spend many resources and use tools that are not always available for the general crowd. This doesn’t mean that they don’t have occasional colossal losses; they do (like Melvin Capital’s recent GameStop losses). However, it is still a good idea to keep an eye on hedge fund activity. With this in mind, as the current round of 13F filings has just ended, let’s examine the smart money sentiment towards SCVX Corp. (NYSE:SCVX).
SCVX Corp. (NYSE:SCVX) shareholders have witnessed a decrease in hedge fund sentiment lately. SCVX Corp. (NYSE:SCVX) was in 23 hedge funds’ portfolios at the end of September. The all time high for this statistic is 26. There were 26 hedge funds in our database with SCVX positions at the end of the second quarter. Our calculations also showed that SCVX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).
Israel Englander of Millennium Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. Keeping this in mind we’re going to take a peek at the latest hedge fund action surrounding SCVX Corp. (NYSE:SCVX).
Do Hedge Funds Think SCVX Is A Good Stock To Buy Now?
At third quarter’s end, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from the previous quarter. By comparison, 17 hedge funds held shares or bullish call options in SCVX a year ago. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were adding to their stakes considerably (or already accumulated large positions).
The largest stake in SCVX Corp. (NYSE:SCVX) was held by Hudson Bay Capital Management, which reported holding $23.5 million worth of stock at the end of September. It was followed by Magnetar Capital with a $11.7 million position. Other investors bullish on the company included Millennium Management, Weiss Asset Management, and Aristeia Capital. In terms of the portfolio weights assigned to each position Hudson Bay Capital Management allocated the biggest weight to SCVX Corp. (NYSE:SCVX), around 0.32% of its 13F portfolio. RiverPark Advisors is also relatively very bullish on the stock, setting aside 0.17 percent of its 13F equity portfolio to SCVX.
Because SCVX Corp. (NYSE:SCVX) has witnessed a decline in interest from the entirety of the hedge funds we track, it’s easy to see that there were a few hedge funds who sold off their full holdings heading into Q4. It’s worth mentioning that Nathaniel August’s Mangrove Partners sold off the biggest investment of all the hedgies monitored by Insider Monkey, comprising close to $3 million in stock, and Parvinder Thiara’s Athanor Capital was right behind this move, as the fund said goodbye to about $0.2 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 3 funds heading into Q4.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as SCVX Corp. (NYSE:SCVX) but similarly valued. We will take a look at FS Bancorp, Inc. (NASDAQ:FSBW), Viridian Therapeutics, Inc. (NASDAQ:VRDN), Qutoutiao Inc. (NASDAQ:QTT), Harvard Bioscience, Inc. (NASDAQ:HBIO), Vincerx Pharma, Inc. (NASDAQ:VINC), NL Industries, Inc. (NYSE:NL), and Co-Diagnostics, Inc. (NASDAQ:CODX). This group of stocks’ market values are closest to SCVX’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FSBW | 7 | 19610 | 0 |
| VRDN | 19 | 164057 | 7 |
| QTT | 2 | 159 | -1 |
| HBIO | 14 | 59987 | 0 |
| VINC | 19 | 141588 | 4 |
| NL | 2 | 1107 | 0 |
| CODX | 8 | 14502 | -3 |
| Average | 10.1 | 57287 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.1 hedge funds with bullish positions and the average amount invested in these stocks was $57 million. That figure was $106 million in SCVX’s case. Viridian Therapeutics, Inc. (NASDAQ:VRDN) is the most popular stock in this table. On the other hand Qutoutiao Inc. (NASDAQ:QTT) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks SCVX Corp. (NYSE:SCVX) is more popular among hedge funds. Our overall hedge fund sentiment score for SCVX is 78.5. 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. 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 31.1% in 2021 through December 9th and still beat the market by 5.1 percentage points. Unfortunately SCVX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on SCVX were disappointed as the stock returned 0.4% since the end of the third quarter (through 12/9) 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 since 2019.
Follow Scvx Corp. (NYSE:SCVX)
Follow Scvx Corp. (NYSE:SCVX)
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Disclosure: None. This article was originally published at Insider Monkey.
