After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards CureVac N.V. (NASDAQ:CVAC).
Is CVAC a good stock to buy now? Money managers were turning bullish. The number of long hedge fund bets moved up by 9 in recent months. CureVac N.V. (NASDAQ:CVAC) was in 9 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that CVAC 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
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. With all of this in mind let’s go over the fresh hedge fund action surrounding CureVac N.V. (NASDAQ:CVAC).
Do Hedge Funds Think CVAC Is A Good Stock To Buy Now?
At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9 from the previous quarter. The graph below displays the number of hedge funds with bullish position in CVAC over the last 21 quarters. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, Samsara BioCapital held the most valuable stake in CureVac N.V. (NASDAQ:CVAC), which was worth $17.2 million at the end of the third quarter. On the second spot was Millennium Management which amassed $14.2 million worth of shares. Hillhouse Capital Management, Vivo Capital, and Citadel Investment Group were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Samsara BioCapital allocated the biggest weight to CureVac N.V. (NASDAQ:CVAC), around 4.81% of its 13F portfolio. Vivo Capital is also relatively very bullish on the stock, setting aside 0.46 percent of its 13F equity portfolio to CVAC.
As aggregate interest increased, some big names were leading the bulls’ herd. Samsara BioCapital, managed by Srini Akkaraju and Michael Dybbs, initiated the largest position in CureVac N.V. (NASDAQ:CVAC). Samsara BioCapital had $17.2 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also initiated a $14.2 million position during the quarter. The other funds with new positions in the stock are Lei Zhang’s Hillhouse Capital Management, Albert Cha and Frank Kung’s Vivo Capital, and Kerr Neilson’s Platinum Asset Management.
Let’s now review hedge fund activity in other stocks similar to CureVac N.V. (NASDAQ:CVAC). We will take a look at Algonquin Power & Utilities Corp. (NYSE:AQN), Vail Resorts, Inc. (NYSE:MTN), Carlyle Group Inc. (NASDAQ:CG), Lyft, Inc. (NASDAQ:LYFT), Aspen Technology, Inc. (NASDAQ:AZPN), Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), and Farfetch Limited (NYSE:FTCH). This group of stocks’ market values are closest to CVAC’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 22.7 hedge funds with bullish positions and the average amount invested in these stocks was $650 million. That figure was $54 million in CVAC’s case. Farfetch Limited (NYSE:FTCH) is the most popular stock in this table. On the other hand Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is the least popular one with only 6 bullish hedge fund positions. CureVac N.V. (NASDAQ:CVAC) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for CVAC is 17.1. 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 CVAC as the stock returned 179.4% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.