Is HSKA A Good Stock To Buy Now?

In this article we will analyze whether Heska Corp (NASDAQ:HSKA) is a good investment right now by following the lead of some of the best investors in the world and piggybacking their ideas. There’s no better way to get these firms’ immense resources and analytical capabilities working for us than to follow their lead into their best ideas. While not all of these picks will be winners, our research shows that these picks historically outperformed the market by double digits annually.

Is HSKA a good stock to buy now? Heska Corp (NASDAQ:HSKA) was in 15 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 15. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. HSKA has seen an increase in hedge fund sentiment in recent months. There were 14 hedge funds in our database with HSKA positions at the end of the second quarter. Our calculations also showed that HSKA 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.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 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.


Paul Tudor Jones of Tudor Investment Corp

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 we’re going to view the key hedge fund action encompassing Heska Corp (NASDAQ:HSKA).

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

At third quarter’s end, a total of 15 of the hedge funds tracked by Insider Monkey were long this stock, a change of 7% from one quarter earlier. On the other hand, there were a total of 14 hedge funds with a bullish position in HSKA 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.

More specifically, Nine Ten Partners was the largest shareholder of Heska Corp (NASDAQ:HSKA), with a stake worth $77.5 million reported as of the end of September. Trailing Nine Ten Partners was Park West Asset Management, which amassed a stake valued at $29.3 million. Eversept Partners, Millennium Management, and SG Capital Management 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 Nine Ten Partners allocated the biggest weight to Heska Corp (NASDAQ:HSKA), around 16.1% of its 13F portfolio. Eversept Partners is also relatively very bullish on the stock, earmarking 3.53 percent of its 13F equity portfolio to HSKA.

With a general bullishness amongst the heavyweights, some big names have been driving this bullishness. Intrinsic Edge Capital, managed by Mark Coe, assembled the largest position in Heska Corp (NASDAQ:HSKA). Intrinsic Edge Capital had $3.5 million invested in the company at the end of the quarter. Paul Tudor Jones’s Tudor Investment Corp also made a $0.5 million investment in the stock during the quarter.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Heska Corp (NASDAQ:HSKA) but similarly valued. These stocks are e.l.f. Beauty, Inc. (NYSE:ELF), Replimune Group, Inc. (NASDAQ:REPL), Arvinas, Inc. (NASDAQ:ARVN), BioLife Solutions, Inc. (NASDAQ:BLFS), New Mountain Finance Corp. (NASDAQ:NMFC), City Holding Company (NASDAQ:CHCO), and NetGear, Inc. (NASDAQ:NTGR). This group of stocks’ market valuations are similar to HSKA’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ELF 24 230236 2
REPL 14 169325 3
ARVN 26 181239 -5
BLFS 13 254136 2
NMFC 10 22832 0
CHCO 6 6311 0
NTGR 20 65372 1
Average 16.1 132779 0.4

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.1 hedge funds with bullish positions and the average amount invested in these stocks was $133 million. That figure was $155 million in HSKA’s case. Arvinas, Inc. (NASDAQ:ARVN) is the most popular stock in this table. On the other hand City Holding Company (NASDAQ:CHCO) is the least popular one with only 6 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 58.5. 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on HSKA as the stock returned 42.6% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.

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