Hedge Funds Are Getting Bullish On 10x Genomics, Inc. (TXG)

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. In this article we look at what those investors think of 10x Genomics, Inc. (NASDAQ:TXG).

Is 10x Genomics, Inc. (NASDAQ:TXG) a cheap investment now? The best stock pickers are taking an optimistic view. The number of bullish hedge fund positions moved up by 8 lately. Our calculations also showed that TXG 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). TXG was in 20 hedge funds’ portfolios at the end of March. There were 12 hedge funds in our database with TXG positions at the end of the previous quarter.

Video: Watch our video about the top 5 most popular hedge fund stocks.

To most investors, hedge funds are assumed to be worthless, outdated financial vehicles of the past. While there are over 8000 funds in operation at the moment, Our researchers choose to focus on the leaders of this club, around 850 funds. Most estimates calculate that this group of people direct the lion’s share of the smart money’s total asset base, and by monitoring their highest performing picks, Insider Monkey has brought to light many investment strategies that have historically outstripped the broader indices. Insider Monkey’s flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per annum since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .

Steven Cohen of Point72 Asset Management

We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Now we’re going to analyze the latest hedge fund action surrounding 10x Genomics, Inc. (NASDAQ:TXG).

What have hedge funds been doing with 10x Genomics, Inc. (NASDAQ:TXG)?

At Q1’s end, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 67% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards TXG over the last 18 quarters. With hedge funds’ capital changing hands, there exists a select group of key hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).

The largest stake in 10x Genomics, Inc. (NASDAQ:TXG) was held by JS Capital, which reported holding $88.1 million worth of stock at the end of September. It was followed by Point72 Asset Management with a $15.9 million position. Other investors bullish on the company included Perceptive Advisors, Alyeska Investment Group, and OrbiMed Advisors. In terms of the portfolio weights assigned to each position JS Capital allocated the biggest weight to 10x Genomics, Inc. (NASDAQ:TXG), around 11.08% of its 13F portfolio. Logos Capital is also relatively very bullish on the stock, designating 1.73 percent of its 13F equity portfolio to TXG.

As one would reasonably expect, specific money managers were leading the bulls’ herd. Point72 Asset Management, managed by Steve Cohen, created the largest position in 10x Genomics, Inc. (NASDAQ:TXG). Point72 Asset Management had $15.9 million invested in the company at the end of the quarter. Anand Parekh’s Alyeska Investment Group also made a $6.7 million investment in the stock during the quarter. The following funds were also among the new TXG investors: Samuel Isaly’s OrbiMed Advisors, Arsani William’s Logos Capital, and Paul Marshall and Ian Wace’s Marshall Wace LLP.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as 10x Genomics, Inc. (NASDAQ:TXG) but similarly valued. We will take a look at PulteGroup, Inc. (NYSE:PHM), GCI Liberty, Inc. (NASDAQ:GLIBA), BanColombia S.A. (NYSE:CIB), and Formula One Group (NASDAQ:FWONA). This group of stocks’ market values are similar to TXG’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PHM 36 465706 2
GLIBA 49 1833581 2
CIB 11 86861 -3
FWONA 17 257605 -5
Average 28.25 660938 -1

View table here if you experience formatting issues.

As you can see these stocks had an average of 28.25 hedge funds with bullish positions and the average amount invested in these stocks was $661 million. That figure was $167 million in TXG’s case. GCI Liberty, Inc. (NASDAQ:GLIBA) is the most popular stock in this table. On the other hand BanColombia S.A. (NYSE:CIB) is the least popular one with only 11 bullish hedge fund positions. 10x Genomics, Inc. (NASDAQ:TXG) 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 12.2% in 2020 through June 17th and still beat the market by 14.8 percentage points. A small number of hedge funds were also right about betting on TXG as the stock returned 41.7% 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.