In this article we will analyze whether IDEAYA Biosciences, Inc. (NASDAQ:IDYA) 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 IDYA a good stock to buy now? IDEAYA Biosciences, Inc. (NASDAQ:IDYA) shares haven’t seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 12 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that IDYA 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 Nam Tai Property Inc (NYSE:NTP), Ovid Therapeutics Inc. (NASDAQ:OVID), and NI Holdings, Inc. (NASDAQ:NODK) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
To most market participants, hedge funds are perceived as unimportant, outdated investment tools of yesteryear. While there are more than 8000 funds in operation at the moment, We hone in on the aristocrats of this club, around 850 funds. Most estimates calculate that this group of people preside over the lion’s share of the hedge fund industry’s total asset base, and by tracking their matchless stock picks, Insider Monkey has brought to light a few investment strategies that have historically exceeded the market. Insider Monkey’s flagship short hedge fund strategy surpassed the S&P 500 short ETFs by around 20 percentage points per annum 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 we’re going to review the key hedge fund action regarding IDEAYA Biosciences, Inc. (NASDAQ:IDYA).
Do Hedge Funds Think IDYA Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards IDYA over the last 21 quarters. With hedge funds’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Mark Lampert’s Biotechnology Value Fund / BVF Inc has the number one position in IDEAYA Biosciences, Inc. (NASDAQ:IDYA), worth close to $40.5 million, amounting to 2.2% of its total 13F portfolio. The second largest stake is held by Steve Cohen of Point72 Asset Management, with a $14.5 million position; 0.1% of its 13F portfolio is allocated to the stock. Remaining members of the smart money with similar optimism contain Nathan Fischel’s DAFNA Capital Management, Kerr Neilson’s Platinum Asset Management and Anand Parekh’s Alyeska Investment Group. In terms of the portfolio weights assigned to each position Biotechnology Value Fund / BVF Inc allocated the biggest weight to IDEAYA Biosciences, Inc. (NASDAQ:IDYA), around 2.21% of its 13F portfolio. DAFNA Capital Management is also relatively very bullish on the stock, dishing out 1.35 percent of its 13F equity portfolio to IDYA.
Because IDEAYA Biosciences, Inc. (NASDAQ:IDYA) has witnessed falling interest from the smart money, logic holds that there exists a select few money managers that slashed their full holdings last quarter. Interestingly, Ken Griffin’s Citadel Investment Group dropped the biggest investment of all the hedgies watched by Insider Monkey, totaling an estimated $3.5 million in stock, and Richard Driehaus’s Driehaus Capital was right behind this move, as the fund said goodbye to about $1.5 million worth. These moves are interesting, as aggregate 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 IDEAYA Biosciences, Inc. (NASDAQ:IDYA). We will take a look at Nam Tai Property Inc (NYSE:NTP), Ovid Therapeutics Inc. (NASDAQ:OVID), NI Holdings, Inc. (NASDAQ:NODK), Caleres Inc (NYSE:CAL), Helix Energy Solutions Group Inc. (NYSE:HLX), Tuscan Holdings Corp. (NASDAQ:THCB), and Benefitfocus Inc (NASDAQ:BNFT). This group of stocks’ market caps are similar to IDYA’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
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As you can see these stocks had an average of 12.1 hedge funds with bullish positions and the average amount invested in these stocks was $37 million. That figure was $69 million in IDYA’s case. Benefitfocus Inc (NASDAQ:BNFT) is the most popular stock in this table. On the other hand Nam Tai Property Inc (NYSE:NTP) is the least popular one with only 4 bullish hedge fund positions. IDEAYA Biosciences, Inc. (NASDAQ:IDYA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for IDYA is 63.6. 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 IDYA as the stock returned 39.5% 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.