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Hedge Funds Are Selling USANA Health Sciences, Inc. (USNA)

Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 750 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about USANA Health Sciences, Inc. (NYSE:USNA) in this article.

USANA Health Sciences, Inc. (NYSE:USNA) shareholders have witnessed a decrease in hedge fund sentiment lately. Our calculations also showed that USNA isn’t among the 30 most popular stocks among hedge funds (see the video below).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to 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’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 40 percentage points since May 2014 through May 30, 2019 (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 25.7% through September 30, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

USNA_oct2019

Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. We’re going to go over the fresh hedge fund action surrounding USANA Health Sciences, Inc. (NYSE:USNA).

What have hedge funds been doing with USANA Health Sciences, Inc. (NYSE:USNA)?

At Q2’s end, a total of 13 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -41% from the previous quarter. On the other hand, there were a total of 16 hedge funds with a bullish position in USNA a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Matthew Hulsizer PEAK6 Capital

More specifically, Renaissance Technologies was the largest shareholder of USANA Health Sciences, Inc. (NYSE:USNA), with a stake worth $142.1 million reported as of the end of March. Trailing Renaissance Technologies was D E Shaw, which amassed a stake valued at $21.6 million. AQR Capital Management, GLG Partners, and Arrowstreet Capital were also very fond of the stock, giving the stock large weights in their portfolios.

Since USANA Health Sciences, Inc. (NYSE:USNA) has experienced falling interest from the aggregate hedge fund industry, logic holds that there were a few fund managers that elected to cut their entire stakes by the end of the second quarter. Interestingly, David Costen Haley’s HBK Investments dumped the largest position of all the hedgies watched by Insider Monkey, valued at an estimated $8.4 million in stock. Paul Marshall and Ian Wace’s fund, Marshall Wace LLP, also dropped its stock, about $3.5 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 9 funds by the end of the second quarter.

Let’s go over hedge fund activity in other stocks similar to USANA Health Sciences, Inc. (NYSE:USNA). We will take a look at PennyMac Financial Services Inc (NYSE:PFSI), SJW Group (NYSE:SJW), Deluxe Corporation (NYSE:DLX), and SailPoint Technologies Holdings, Inc. (NYSE:SAIL). This group of stocks’ market caps match USNA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PFSI 16 104584 0
SJW 15 168186 0
DLX 19 126428 -2
SAIL 22 290722 -5
Average 18 172480 -1.75

View table here if you experience formatting issues.

As you can see these stocks had an average of 18 hedge funds with bullish positions and the average amount invested in these stocks was $172 million. That figure was $248 million in USNA’s case. SailPoint Technologies Holdings, Inc. (NYSE:SAIL) is the most popular stock in this table. On the other hand SJW Group (NYSE:SJW) is the least popular one with only 15 bullish hedge fund positions. Compared to these stocks USANA Health Sciences, Inc. (NYSE:USNA) is even less popular than SJW. Hedge funds dodged a bullet by taking a bearish stance towards USNA. Our calculations showed that the top 20 most popular hedge fund stocks returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately USNA wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); USNA investors were disappointed as the stock returned -13.9% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far in 2019.

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

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