EXACT Sciences Corporation (EXAS): Are Hedge Funds Right About This Stock?

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 867 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 September 30th. In this article we look at what those investors think of EXACT Sciences Corporation (NASDAQ:EXAS).

EXACT Sciences Corporation (NASDAQ:EXAS) investors should be aware of an increase in activity from the world’s largest hedge funds lately. EXACT Sciences Corporation (NASDAQ:EXAS) was in 40 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 43. Our calculations also showed that EXAS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

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 analyze the fresh hedge fund action surrounding EXACT Sciences Corporation (NASDAQ:EXAS).

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Ricky Sandler of Eminence Capital

Do Hedge Funds Think EXAS Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 40 of the hedge funds tracked by Insider Monkey were long this stock, a change of 14% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards EXAS over the last 25 quarters. With hedge funds’ sentiment swirling, there exists a few noteworthy hedge fund managers who were upping their stakes significantly (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Catherine D. Wood’s ARK Investment Management has the largest position in EXACT Sciences Corporation (NASDAQ:EXAS), worth close to $1.1195 billion, accounting for 2.7% of its total 13F portfolio. The second most bullish fund manager is Casdin Capital, managed by Eli Casdin, which holds a $225.3 million position; the fund has 5.6% of its 13F portfolio invested in the stock. Remaining members of the smart money that hold long positions contain Nancy Zevenbergen’s Zevenbergen Capital Investments, Ricky Sandler’s Eminence Capital and Farallon Capital. In terms of the portfolio weights assigned to each position Casdin Capital allocated the biggest weight to EXACT Sciences Corporation (NASDAQ:EXAS), around 5.61% of its 13F portfolio. Cota Capital is also relatively very bullish on the stock, setting aside 4.2 percent of its 13F equity portfolio to EXAS.

Consequently, some big names have jumped into EXACT Sciences Corporation (NASDAQ:EXAS) headfirst. LMR Partners, managed by Ben Levine, Andrew Manuel and Stefan Renold, created the most outsized position in EXACT Sciences Corporation (NASDAQ:EXAS). LMR Partners had $9.9 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $2.6 million investment in the stock during the quarter. The following funds were also among the new EXAS investors: Richard SchimeláandáLawrence Sapanski’s Cinctive Capital Management, Alec Litowitz and Ross Laser’s Magnetar Capital, and Peter Muller’s PDT Partners.

Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as EXACT Sciences Corporation (NASDAQ:EXAS) but similarly valued. These stocks are Markel Corporation (NYSE:MKL), Viatris Inc. (NASDAQ:VTRS), Westinghouse Air Brake Technologies Corporation (NYSE:WAB), Conagra Brands, Inc. (NYSE:CAG), Coupa Software Incorporated (NASDAQ:COUP), GoodRx Holdings, Inc. (NASDAQ:GDRX), and 10x Genomics, Inc. (NASDAQ:TXG). All of these stocks’ market caps are closest to EXAS’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
MKL 25 689937 -8
VTRS 55 1466403 2
WAB 38 2982164 -8
CAG 20 625323 -9
COUP 52 4542300 -2
GDRX 26 1063016 -2
TXG 28 963031 0
Average 34.9 1761739 -3.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 34.9 hedge funds with bullish positions and the average amount invested in these stocks was $1762 million. That figure was $1984 million in EXAS’s case. Viatris Inc. (NASDAQ:VTRS) is the most popular stock in this table. On the other hand Conagra Brands, Inc. (NYSE:CAG) is the least popular one with only 20 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. Our overall hedge fund sentiment score for EXAS is 66.5. 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 positive signal but 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 28.6% in 2021 through November 30th and beat the market again by 5.6 percentage points. Unfortunately EXAS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on EXAS were disappointed as the stock returned -10.6% since the end of September (through 11/30) 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 many of these stocks already outperformed the market since 2019.

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