Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
In this article, we are going to take a closer look at the latest hedge fund action surrounding EXACT Sciences Corporation (NASDAQ:EXAS). Overall, the company saw an increase in popularity among smart money investors last quarter. Among the funds we track, 31 investors held shares of EXACT Sciences Corporation at the end of September, versus 16 funds at the end of June. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Universal Forest Products, Inc. (NASDAQ:UFPI), WPP PLC (ADR) (NASDAQ:WPPGY), and Evercore Partners Inc. (NYSE:EVR) to gather more data points.
We care about hedge fund sentiment because historically hedge funds’ stock picks delivered strong risk adjusted returns. There are certain segments of the market where hedge funds’ stock picks performed much better than its benchmarks. For instance, the 30 most popular mid-cap stocks among the best performing hedge funds returned 18% over the last 12 months outpacing S&P 500 Index by more than 10 percentage points. We developed this strategy 2.5 years ago and started sharing its picks in our quarterly newsletter. It bested the S&P 500 Index ETFs by delivering a solid 39% vs. 22% gain for its benchmarks.
Keeping this in mind, we’re going to take a peek at the fresh action surrounding EXACT Sciences Corporation (NASDAQ:EXAS).
How have hedgies been trading EXACT Sciences Corporation (NASDAQ:EXAS)?
At the end of September, 31 funds tracked by Insider Monkey held long positions in EXACT Sciences Corporation, which represents an increase of 94% from one quarter earlier. On the other hand, there were a total of 20 hedge funds with a bullish position in EXAS at the beginning of this year. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, David E. Shaw’s D E Shaw has the largest position in EXACT Sciences Corporation (NASDAQ:EXAS), worth close to $101.1 million, comprising 0.2% of its total 13F portfolio. The second largest stake is held by OrbiMed Advisors, led by Samuel Isaly, which disclosed a $20.5 million position; the fund has 0.2% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors with similar optimism include Israel Englander’s Millennium Management and Dmitry Balyasny’s Balyasny Asset Management. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.