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Hedge Funds Have Never Been More Bullish On Virtus Investment Partners Inc (VRTS)

The 700+ hedge funds and famous money managers tracked by Insider Monkey have already compiled and submitted their 13F filings for the second quarter, which unveil their equity positions as of June 28. We went through these filings, fixed typos and other more significant errors and identified the changes in hedge fund portfolios. Our extensive review of these public filings is finally over, so this article is set to reveal the smart money sentiment towards Virtus Investment Partners Inc (NASDAQ:VRTS).

Virtus Investment Partners Inc (NASDAQ:VRTS) was in 17 hedge funds’ portfolios at the end of the second quarter of 2019. VRTS has experienced an increase in support from the world’s most elite money managers lately. There were 15 hedge funds in our database with VRTS positions at the end of the previous quarter. Our calculations also showed that VRTS 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.

Why do we pay any attention at all to hedge fund sentiment? 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.

Nathaniel August - Mangrove Partners

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 check out the recent hedge fund action encompassing Virtus Investment Partners Inc (NASDAQ:VRTS).

Hedge fund activity in Virtus Investment Partners Inc (NASDAQ:VRTS)

At the end of the second quarter, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 13% from the previous quarter. The graph below displays the number of hedge funds with bullish position in VRTS over the last 16 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

VRTS_oct2019

The largest stake in Virtus Investment Partners Inc (NASDAQ:VRTS) was held by Mangrove Partners, which reported holding $32.3 million worth of stock at the end of March. It was followed by Weiss Asset Management with a $22.3 million position. Other investors bullish on the company included D E Shaw, Millennium Management, and Huber Capital Management.

As one would reasonably expect, key hedge funds were leading the bulls’ herd. Renaissance Technologies, created the most outsized position in Virtus Investment Partners Inc (NASDAQ:VRTS). Renaissance Technologies had $4 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also initiated a $0.7 million position during the quarter. The other funds with brand new VRTS positions are Paul Tudor Jones’s Tudor Investment Corp, Matthew Tewksbury’s Stevens Capital Management, and Benjamin A. Smith’s Laurion Capital Management.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Virtus Investment Partners Inc (NASDAQ:VRTS) but similarly valued. These stocks are The Providence Service Corporation (NASDAQ:PRSC), Intellia Therapeutics, Inc. (NASDAQ:NTLA), Arvinas, Inc. (NASDAQ:ARVN), and Cornerstone Building Brands, Inc. (NYSE:CNR). All of these stocks’ market caps match VRTS’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
PRSC 14 163226 2
NTLA 12 24081 2
ARVN 13 152734 -1
CNR 15 63239 -2
Average 13.5 100820 0.25

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.5 hedge funds with bullish positions and the average amount invested in these stocks was $101 million. That figure was $112 million in VRTS’s case. Cornerstone Building Brands, Inc. (NYSE:CNR) is the most popular stock in this table. On the other hand Intellia Therapeutics, Inc. (NASDAQ:NTLA) is the least popular one with only 12 bullish hedge fund positions. Compared to these stocks Virtus Investment Partners Inc (NASDAQ:VRTS) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Hedge funds were also right about betting on VRTS, though not to the same extent, as the stock returned 3.5% during the third quarter and outperformed the market as well.

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

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