The Insider Monkey team has completed processing the quarterly 13F filings for the September quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Accolade, Inc. (NASDAQ:ACCD).
Is ACCD a good stock to buy now? Money managers were betting on the stock. The number of long hedge fund positions went up by 11 in recent months. Accolade, Inc. (NASDAQ:ACCD) was in 11 hedge funds’ portfolios at the end of September. Our calculations also showed that ACCD isn’t among the 30 most popular stocks among hedge funds (click for Q3 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 66 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 13% through November 17th. 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. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our website. Now let’s go over the new hedge fund action regarding Accolade, Inc. (NASDAQ:ACCD).
Do Hedge Funds Think ACCD Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 11 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 11 from the second quarter of 2020. On the other hand, there were a total of 0 hedge funds with a bullish position in ACCD a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Deerfield Management, managed by James E. Flynn, holds the biggest position in Accolade, Inc. (NASDAQ:ACCD). Deerfield Management has a $24.3 million position in the stock, comprising 0.6% of its 13F portfolio. Sitting at the No. 2 spot is Kris Jenner, Gordon Bussard, Graham McPhail of Rock Springs Capital Management, with a $12.6 million position; the fund has 0.3% of its 13F portfolio invested in the stock. Some other members of the smart money that hold long positions include Joseph Edelman’s Perceptive Advisors, Henrik Rhenman’s Rhenman & Partners Asset Management and Anand Parekh’s Alyeska Investment Group. In terms of the portfolio weights assigned to each position Copernicus Capital Management allocated the biggest weight to Accolade, Inc. (NASDAQ:ACCD), around 1.85% of its 13F portfolio. Deerfield Management is also relatively very bullish on the stock, earmarking 0.59 percent of its 13F equity portfolio to ACCD.
As one would reasonably expect, some big names have been driving this bullishness. Deerfield Management, managed by James E. Flynn, created the biggest position in Accolade, Inc. (NASDAQ:ACCD). Deerfield Management had $24.3 million invested in the company at the end of the quarter. Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management also made a $12.6 million investment in the stock during the quarter. The other funds with new positions in the stock are Joseph Edelman’s Perceptive Advisors, Henrik Rhenman’s Rhenman & Partners Asset Management, and Anand Parekh’s Alyeska Investment Group.
Let’s now review hedge fund activity in other stocks similar to Accolade, Inc. (NASDAQ:ACCD). These stocks are Independent Bank Group Inc (NASDAQ:IBTX), Badger Meter, Inc. (NYSE:BMI), Chimera Investment Corporation (NYSE:CIM), Pacific Premier Bancorp, Inc. (NASDAQ:PPBI), Prospect Capital Corporation (NASDAQ:PSEC), Pacific Biosciences of California, Inc. (NASDAQ:PACB), and CommVault Systems, Inc. (NASDAQ:CVLT). This group of stocks’ market caps resemble ACCD’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 15.9 hedge funds with bullish positions and the average amount invested in these stocks was $172 million. That figure was $65 million in ACCD’s case. Pacific Biosciences of California, Inc. (NASDAQ:PACB) is the most popular stock in this table. On the other hand Prospect Capital Corporation (NASDAQ:PSEC) is the least popular one with only 7 bullish hedge fund positions. Accolade, Inc. (NASDAQ:ACCD) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for ACCD is 27.8. 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. Our calculations showed that top 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and still beat the market by 16.2 percentage points. A small number of hedge funds were also right about betting on ACCD as the stock returned 49% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.