Here is What Hedge Funds Think About Heska Corp (HSKA)

In this article we will check out the progression of hedge fund sentiment towards Heska Corp (NASDAQ:HSKA) 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 Heska Corp (NASDAQ:HSKA) going to take off soon? Investors who are in the know were taking an optimistic view. The number of long hedge fund positions rose by 2 recently. Heska Corp (NASDAQ:HSKA) was in 22 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 28. Our calculations also showed that HSKA isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 20 hedge funds in our database with HSKA positions at the end of the second quarter.

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Keeping this in mind we’re going to check out the recent hedge fund action surrounding Heska Corp (NASDAQ:HSKA).

Phill Gross Adage Capital Phillip Gross

Phillip Gross of Adage Capital

Do Hedge Funds Think HSKA Is A Good Stock To Buy Now?

Heading into the fourth quarter of 2021, a total of 22 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from the second quarter of 2021. Below, you can check out the change in hedge fund sentiment towards HSKA over the last 25 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

According to Insider Monkey’s hedge fund database, Brian Bares, Russell Mollen, and James Bradshaw’s Nine Ten Partners has the number one position in Heska Corp (NASDAQ:HSKA), worth close to $226.3 million, amounting to 24.2% of its total 13F portfolio. On Nine Ten Partners’s heels is Phill Gross and Robert Atchinson of Adage Capital Management, with a $25.9 million position; 0.1% of its 13F portfolio is allocated to the stock. Some other professional money managers with similar optimism include Josh Goldberg’s G2 Investment Partners Management, Israel Englander’s Millennium Management and Bryan Hinmon’s Motley Fool Asset Management. In terms of the portfolio weights assigned to each position Nine Ten Partners allocated the biggest weight to Heska Corp (NASDAQ:HSKA), around 24.2% of its 13F portfolio. G2 Investment Partners Management is also relatively very bullish on the stock, setting aside 3.9 percent of its 13F equity portfolio to HSKA.

With a general bullishness amongst the heavyweights, key hedge funds have jumped into Heska Corp (NASDAQ:HSKA) headfirst. Bares Capital Management, managed by Brian Bares, initiated the most outsized position in Heska Corp (NASDAQ:HSKA). Bares Capital Management had $8.4 million invested in the company at the end of the quarter. Ken Grossman and Glen Schneider’s SG Capital Management also initiated a $3.6 million position during the quarter. The following funds were also among the new HSKA investors: D. E. Shaw’s D E Shaw, Joel Greenblatt’s Gotham Asset Management, and Lee Ainslie’s Maverick Capital.

Let’s also examine hedge fund activity in other stocks similar to Heska Corp (NASDAQ:HSKA). These stocks are CNX Resources Corporation (NYSE:CNX), Green Dot Corporation (NYSE:GDOT), Domtar Corporation (NYSE:UFS), Enovix Corporation (NASDAQ:ENVX), First Bancorp (NYSE:FBP), Cadence Bank (NYSE:CADE), and Yelp Inc (NYSE:YELP). This group of stocks’ market values are closest to HSKA’s market value.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
CNX 34 525941 4
GDOT 23 575860 1
UFS 21 355182 -8
ENVX 23 661835 23
FBP 26 253717 1
CADE 24 113674 -1
YELP 26 534890 -1
Average 25.3 431586 2.7

View table here if you experience formatting issues.

As you can see these stocks had an average of 25.3 hedge funds with bullish positions and the average amount invested in these stocks was $432 million. That figure was $359 million in HSKA’s case. CNX Resources Corporation (NYSE:CNX) is the most popular stock in this table. On the other hand Domtar Corporation (NYSE:UFS) is the least popular one with only 21 bullish hedge fund positions. Heska Corp (NASDAQ:HSKA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for HSKA is 34.4. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and surpassed the market again by 3.6 percentage points. Unfortunately HSKA wasn’t nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); HSKA investors were disappointed as the stock returned -29.4% since the end of September (through 12/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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