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Hedge Funds Are Buying CryoPort, Inc. (CYRX)

In this article we will check out the progression of hedge fund sentiment towards CryoPort, Inc. (NASDAQ:CYRX) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and 20 payment structure, hedge funds have more incentives and resources than the average investor. The funds have access to expert networks and get tips from industry insiders. They also employ numerous Ivy League graduates and MBAs. Like everyone else, hedge funds perform miserably at times, but their consensus picks have historically outperformed the market after risk adjustments.

Is CryoPort, Inc. (NASDAQ:CYRX) a buy, sell, or hold? Investors who are in the know are getting more bullish. The number of bullish hedge fund positions increased by 1 lately. Our calculations also showed that CYRX 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 was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 36% through May 18th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Bruce Kovner, Caxton Associates LP

Bruce Kovner of Caxton Associates LP

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, We take a look at lists like the 10 most profitable companies in the world to identify the compounders that are likely to deliver double digit returns. We interview hedge fund managers and ask them about their best ideas. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. For example we are checking out stocks recommended/scorned by legendary Bill Miller. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind we’re going to take a look at the new hedge fund action encompassing CryoPort, Inc. (NASDAQ:CYRX).

What does smart money think about CryoPort, Inc. (NASDAQ:CYRX)?

At the end of the first quarter, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CYRX over the last 18 quarters. With hedgies’ sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).

The largest stake in CryoPort, Inc. (NASDAQ:CYRX) was held by Redmile Group, which reported holding $31 million worth of stock at the end of September. It was followed by Columbus Circle Investors with a $5.4 million position. Other investors bullish on the company included Citadel Investment Group, Royce & Associates, and D E Shaw. In terms of the portfolio weights assigned to each position Redmile Group allocated the biggest weight to CryoPort, Inc. (NASDAQ:CYRX), around 0.87% of its 13F portfolio. Columbus Circle Investors is also relatively very bullish on the stock, setting aside 0.3 percent of its 13F equity portfolio to CYRX.

Now, some big names have jumped into CryoPort, Inc. (NASDAQ:CYRX) headfirst. Caxton Associates LP, managed by Bruce Kovner, created the biggest position in CryoPort, Inc. (NASDAQ:CYRX). Caxton Associates LP had $0.2 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $0 million position during the quarter.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as CryoPort, Inc. (NASDAQ:CYRX) but similarly valued. These stocks are Arcus Biosciences, Inc. (NYSE:RCUS), Washington Trust Bancorp, Inc. (NASDAQ:WASH), NextPoint Residential Trust Inc (NYSE:NXRT), and ChipMOS Technologies Inc (NASDAQ:IMOS). This group of stocks’ market values are closest to CYRX’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RCUS 23 51869 8
WASH 7 21341 2
NXRT 11 79180 -5
IMOS 2 29197 -1
Average 10.75 45397 1

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $45 million. That figure was $49 million in CYRX’s case. Arcus Biosciences, Inc. (NYSE:RCUS) is the most popular stock in this table. On the other hand ChipMOS Technologies Inc (NASDAQ:IMOS) is the least popular one with only 2 bullish hedge fund positions. CryoPort, Inc. (NASDAQ:CYRX) 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 13.4% in 2020 through June 22nd and still beat the market by 15.9 percentage points. A small number of hedge funds were also right about betting on CYRX as the stock returned 67.3% 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.