Is Cytokinetics, Incorporated (CYTK) A Good Stock To Buy?

We at Insider Monkey have gone over 752 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Cytokinetics, Incorporated (NASDAQ:CYTK) based on that data.

Cytokinetics, Incorporated (NASDAQ:CYTK) has seen an increase in hedge fund interest recently. Our calculations also showed that CYTK isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
5 Most Popular Stocks Among Hedge Funds
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

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Richard Driehaus of Driehaus Capital

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What have hedge funds been doing with Cytokinetics, Incorporated (NASDAQ:CYTK)?

Heading into the fourth quarter of 2019, a total of 18 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 29% from the second quarter of 2019. On the other hand, there were a total of 13 hedge funds with a bullish position in CYTK a year ago. So, let’s find 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, Biotechnology Value Fund, managed by Mark Lampert, holds the largest position in Cytokinetics, Incorporated (NASDAQ:CYTK). Biotechnology Value Fund has a $47.4 million position in the stock, comprising 5% of its 13F portfolio. Coming in second is Driehaus Capital, managed by Richard Driehaus, which holds a $31 million position; the fund has 1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish include Israel Englander’s Millennium Management, James A. Silverman’s Opaleye Management and Steve Cohen’s Point72 Asset Management. In terms of the portfolio weights assigned to each position Biotechnology Value Fund allocated the biggest weight to Cytokinetics, Incorporated (NASDAQ:CYTK), around 4.98% of its 13F portfolio. Opaleye Management is also relatively very bullish on the stock, dishing out 2.67 percent of its 13F equity portfolio to CYTK.

Consequently, key money managers have jumped into Cytokinetics, Incorporated (NASDAQ:CYTK) headfirst. Pura Vida Investments, managed by Efrem Kamen, established the biggest position in Cytokinetics, Incorporated (NASDAQ:CYTK). Pura Vida Investments had $2.1 million invested in the company at the end of the quarter. Kamran Moghtaderi’s Eversept Partners also made a $2.1 million investment in the stock during the quarter. The other funds with brand new CYTK positions are Cliff Asness’s AQR Capital Management and Peter Algert and Kevin Coldiron’s Algert Coldiron Investors.

Let’s check out hedge fund activity in other stocks similar to Cytokinetics, Inc. (NASDAQ:CYTK). These stocks are Winmark Corporation (NASDAQ:WINA), HomeStreet Inc (NASDAQ:HMST), Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD), and Foundation Building Materials, Inc. (NYSE:FBM). This group of stocks’ market valuations are closest to CYTK’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
WINA 9 95629 3
HMST 14 31095 5
GLDD 24 104208 2
FBM 24 74715 14
Average 17.75 76412 6

View table here if you experience formatting issues.

As you can see these stocks had an average of 17.75 hedge funds with bullish positions and the average amount invested in these stocks was $76 million. That figure was $130 million in CYTK’s case. Great Lakes Dredge & Dock Corporation (NASDAQ:GLDD) is the most popular stock in this table. On the other hand Winmark Corporation (NASDAQ:WINA) is the least popular one with only 9 bullish hedge fund positions. Cytokinetics, Inc. (NASDAQ:CYTK) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately CYTK wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on CYTK were disappointed as the stock returned -15% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.

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