Did Hedge Funds Drop The Ball On EXACT Sciences Corporation (EXAS) ?

Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and investors’ positions as of the end of the fourth quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of EXACT Sciences Corporation (NASDAQ:EXAS) based on that data.

EXACT Sciences Corporation (NASDAQ:EXAS) has seen a decrease in support from the world’s most elite money managers recently. Our calculations also showed that EXAS isn’t among the 30 most popular stocks among hedge funds.

In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s flagship best performing hedge funds strategy returned 20.7% year to date (through March 12th) and outperformed the market even though it draws its stock picks among small-cap stocks. This strategy also outperformed the market by 32 percentage points since its inception (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.

Andreas Halvorsen

Let’s review the latest hedge fund action regarding EXACT Sciences Corporation (NASDAQ:EXAS).

What have hedge funds been doing with EXACT Sciences Corporation (NASDAQ:EXAS)?

At the end of the fourth quarter, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -9% from one quarter earlier. By comparison, 26 hedge funds held shares or bullish call options in EXAS a year ago. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).


More specifically, Viking Global was the largest shareholder of EXACT Sciences Corporation (NASDAQ:EXAS), with a stake worth $249.9 million reported as of the end of September. Trailing Viking Global was D E Shaw, which amassed a stake valued at $113.8 million. JANA Partners, Healthcor Management LP, and Millennium Management were also very fond of the stock, giving the stock large weights in their portfolios.

Since EXACT Sciences Corporation (NASDAQ:EXAS) has faced falling interest from the entirety of the hedge funds we track, we can see that there were a few fund managers that elected to cut their full holdings last quarter. Interestingly, James Crichton’s Hitchwood Capital Management sold off the largest stake of all the hedgies watched by Insider Monkey, totaling close to $57.2 million in stock. Jim Simons’s fund, Renaissance Technologies, also said goodbye to its stock, about $19.7 million worth. These moves are important to note, as aggregate hedge fund interest dropped by 3 funds last quarter.

Let’s go over hedge fund activity in other stocks similar to EXACT Sciences Corporation (NASDAQ:EXAS). We will take a look at National Retail Properties, Inc. (NYSE:NNN), The Ultimate Software Group, Inc. (NASDAQ:ULTI), Spirit AeroSystems Holdings, Inc. (NYSE:SPR), and FactSet Research Systems Inc. (NYSE:FDS). This group of stocks’ market values are similar to EXAS’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
NNN 15 263404 4
ULTI 20 289161 -5
SPR 32 2275785 0
FDS 20 202498 3
Average 21.75 757712 0.5

View table here if you experience formatting issues.

As you can see these stocks had an average of 21.75 hedge funds with bullish positions and the average amount invested in these stocks was $758 million. That figure was $672 million in EXAS’s case. Spirit AeroSystems Holdings, Inc. (NYSE:SPR) is the most popular stock in this table. On the other hand National Retail Properties, Inc. (NYSE:NNN) is the least popular one with only 15 bullish hedge fund positions. EXACT Sciences Corporation (NASDAQ:EXAS) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 15 most popular stocks among hedge funds returned 21.3% through April 8th and outperformed the S&P 500 ETF (SPY) by more than 5 percentage points. Hedge funds were also right about betting on EXAS as the stock returned 47.2% and outperformed the market as well. You can see the entire list of these shrewd hedge funds here.

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