The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We at Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Moderna, Inc. (NASDAQ:MRNA) and determine whether the smart money was really smart about this stock.
Moderna, Inc. (NASDAQ:MRNA) investors should pay attention to an increase in activity from the world’s largest hedge funds recently. Our calculations also showed that MRNA isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
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. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 58 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Kerr Neilson of Platinum Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, legal marijuana is one of the fastest growing industries right now, so we are checking out stock pitches like “the Starbucks of cannabis” to identify the next tenbagger. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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. Hedge fund sentiment towards Tesla reached its all time high at the end of 2019 and Tesla shares more than tripled this year. We are trying to identify other EV revolution winners, so if you have any good ideas send us an email. With all of this in mind let’s take a peek at the latest hedge fund action surrounding Moderna, Inc. (NASDAQ:MRNA).
What have hedge funds been doing with Moderna, Inc. (NASDAQ:MRNA)?
At the end of the first quarter, a total of 25 of the hedge funds tracked by Insider Monkey were long this stock, a change of 108% from the fourth quarter of 2019. On the other hand, there were a total of 15 hedge funds with a bullish position in MRNA a year ago. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
The largest stake in Moderna, Inc. (NASDAQ:MRNA) was held by Theleme Partners, which reported holding $267.5 million worth of stock at the end of September. It was followed by Platinum Asset Management with a $46 million position. Other investors bullish on the company included Viking Global, Millennium Management, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Theleme Partners allocated the biggest weight to Moderna, Inc. (NASDAQ:MRNA), around 19.24% of its 13F portfolio. Logos Capital is also relatively very bullish on the stock, setting aside 5.24 percent of its 13F equity portfolio to MRNA.
With a general bullishness amongst the heavyweights, specific money managers were breaking ground themselves. Millennium Management, managed by Israel Englander, created the biggest position in Moderna, Inc. (NASDAQ:MRNA). Millennium Management had $18.5 million invested in the company at the end of the quarter. Arsani William’s Logos Capital also initiated a $13.8 million position during the quarter. The other funds with new positions in the stock are Scott Bessent’s Key Square Capital Management, Benjamin A. Smith’s Laurion Capital Management, and David Kowitz and Sheldon Kasowitz’s Indus Capital.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Moderna, Inc. (NASDAQ:MRNA) but similarly valued. These stocks are Tractor Supply Company (NASDAQ:TSCO), Teva Pharmaceutical Industries Limited (NYSE:TEVA), Freeport-McMoRan Inc. (NYSE:FCX), and Genuine Parts Company (NYSE:GPC). This group of stocks’ market caps match MRNA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TSCO | 37 | 510015 | -7 |
| TEVA | 29 | 866697 | 6 |
| FCX | 42 | 770016 | -13 |
| GPC | 22 | 164418 | 1 |
| Average | 32.5 | 577787 | -3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 32.5 hedge funds with bullish positions and the average amount invested in these stocks was $578 million. That figure was $425 million in MRNA’s case. Freeport-McMoRan Inc. (NYSE:FCX) is the most popular stock in this table. On the other hand Genuine Parts Company (NYSE:GPC) is the least popular one with only 22 bullish hedge fund positions. Moderna, Inc. (NASDAQ:MRNA) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th and still beat the market by 15.5 percentage points. A small number of hedge funds were also right about betting on MRNA as the stock returned 114.4% during the second quarter and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.
