Is Codexis, Inc. (NASDAQ:CDXS) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is CDXS a good stock to buy now? Hedge fund interest in Codexis, Inc. (NASDAQ:CDXS) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that CDXS 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). The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as Personalis, Inc. (NASDAQ:PSNL), Stratasys, Ltd. (NASDAQ:SSYS), and Echo Global Logistics, Inc. (NASDAQ:ECHO) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
To most investors, hedge funds are assumed to be underperforming, outdated investment tools of years past. While there are greater than 8000 funds in operation at present, Our experts look at the bigwigs of this group, around 850 funds. These investment experts oversee the lion’s share of all hedge funds’ total asset base, and by keeping track of their top stock picks, Insider Monkey has identified numerous investment strategies that have historically outrun the S&P 500 index. Insider Monkey’s flagship short hedge fund strategy defeated the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 13% since February 2017 (through November 17th) even though the market was up 65% during the same period. We just shared a list of 6 short targets in our latest quarterly update .
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. Keeping this in mind let’s check out the latest hedge fund action regarding Codexis, Inc. (NASDAQ:CDXS).
Do Hedge Funds Think CDXS Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 13 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in CDXS over the last 21 quarters. With hedgies’ capital changing hands, there exists a few noteworthy hedge fund managers who were adding to their holdings considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Wilmot B. Harkey and Daniel Mack’s Nantahala Capital Management has the number one position in Codexis, Inc. (NASDAQ:CDXS), worth close to $63 million, corresponding to 1.9% of its total 13F portfolio. Sitting at the No. 2 spot is Casdin Capital, managed by Eli Casdin, which holds a $46.8 million position; the fund has 2.1% of its 13F portfolio invested in the stock. Other professional money managers that hold long positions contain Albert Cha and Frank Kung’s Vivo Capital, James A. Silverman’s Opaleye Management and Douglas T. Granat’s Trigran Investments. In terms of the portfolio weights assigned to each position Opaleye Management allocated the biggest weight to Codexis, Inc. (NASDAQ:CDXS), around 3.21% of its 13F portfolio. Casdin Capital is also relatively very bullish on the stock, earmarking 2.09 percent of its 13F equity portfolio to CDXS.
Seeing as Codexis, Inc. (NASDAQ:CDXS) has experienced a decline in interest from the aggregate hedge fund industry, it’s easy to see that there was a specific group of funds that decided to sell off their entire stakes in the third quarter. Interestingly, Andre F. Perold’s HighVista Strategies dumped the largest position of all the hedgies monitored by Insider Monkey, comprising about $0.4 million in stock. Renaissance Technologies, also cut its stock, about $0.4 million worth. These bearish behaviors are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s now take a look at hedge fund activity in other stocks similar to Codexis, Inc. (NASDAQ:CDXS). We will take a look at Personalis, Inc. (NASDAQ:PSNL), Stratasys, Ltd. (NASDAQ:SSYS), Echo Global Logistics, Inc. (NASDAQ:ECHO), Great Western Bancorp Inc (NYSE:GWB), PBF Energy Inc (NYSE:PBF), PDF Solutions, Inc. (NASDAQ:PDFS), and Brookline Bancorp, Inc. (NASDAQ:BRKL). This group of stocks’ market values match CDXS’s market value.
|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 13.4 hedge funds with bullish positions and the average amount invested in these stocks was $42 million. That figure was $149 million in CDXS’s case. Stratasys, Ltd. (NASDAQ:SSYS) is the most popular stock in this table. On the other hand PDF Solutions, Inc. (NASDAQ:PDFS) is the least popular one with only 10 bullish hedge fund positions. Codexis, Inc. (NASDAQ:CDXS) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CDXS is 60. 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 CDXS as the stock returned 53.7% 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.