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. We are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article we look at how hedge funds traded Myriad Genetics, Inc. (NASDAQ:MYGN) and determine whether the smart money was really smart about this stock.
Myriad Genetics, Inc. (NASDAQ:MYGN) has experienced a decrease in hedge fund sentiment recently. MYGN was in 11 hedge funds’ portfolios at the end of the first quarter of 2020. There were 15 hedge funds in our database with MYGN positions at the end of the previous quarter. Our calculations also showed that MYGN 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.
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. 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. Keeping this in mind let’s review the new hedge fund action encompassing Myriad Genetics, Inc. (NASDAQ:MYGN).
Hedge fund activity in Myriad Genetics, Inc. (NASDAQ:MYGN)
At Q1’s end, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of -27% from the previous quarter. On the other hand, there were a total of 17 hedge funds with a bullish position in MYGN a year ago. With hedge funds’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were adding to their holdings substantially (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, D E Shaw, managed by D. E. Shaw, holds the biggest position in Myriad Genetics, Inc. (NASDAQ:MYGN). D E Shaw has a $38.4 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Stephen DuBois of Camber Capital Management, with a $33.6 million position; the fund has 2% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish contain Larry Robbins’s Glenview Capital, Steve Cohen’s Point72 Asset Management and Cliff Asness’s AQR Capital Management. In terms of the portfolio weights assigned to each position Camber Capital Management allocated the biggest weight to Myriad Genetics, Inc. (NASDAQ:MYGN), around 2.01% of its 13F portfolio. Glenview Capital is also relatively very bullish on the stock, earmarking 0.6 percent of its 13F equity portfolio to MYGN.
Because Myriad Genetics, Inc. (NASDAQ:MYGN) has experienced falling interest from hedge fund managers, we can see that there exists a select few funds who were dropping their full holdings last quarter. It’s worth mentioning that Renaissance Technologies said goodbye to the largest position of the “upper crust” of funds monitored by Insider Monkey, comprising about $2.6 million in stock. Andrew Kurita’s fund, Kettle Hill Capital Management, also said goodbye to its stock, about $2.4 million worth. These transactions are interesting, as total hedge fund interest dropped by 4 funds last quarter.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Myriad Genetics, Inc. (NASDAQ:MYGN) but similarly valued. These stocks are United States Steel Corporation (NYSE:X), Kaman Corporation (NYSE:KAMN), IAMGOLD Corporation (NYSE:IAG), and HNI Corp (NYSE:HNI). All of these stocks’ market caps are similar to MYGN’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.5 hedge funds with bullish positions and the average amount invested in these stocks was $82 million. That figure was $103 million in MYGN’s case. United States Steel Corporation (NYSE:X) is the most popular stock in this table. On the other hand Kaman Corporation (NYSE:KAMN) is the least popular one with only 13 bullish hedge fund positions. Compared to these stocks Myriad Genetics, Inc. (NASDAQ:MYGN) is even less popular than KAMN. Hedge funds dodged a bullet by taking a bearish stance towards MYGN. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but managed to beat the market by 15.5 percentage points. Unfortunately MYGN wasn’t nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); MYGN investors were disappointed as the stock returned -20.8% during the second 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 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.