Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as InVitae Corp (NYSE:NVTA) but similarly valued. These stocks are First Connecticut Bancorp Inc (NASDAQ:FBNK), Gafisa SA (ADR) (NYSE:GFA), Silicon Graphics International Corp (NASDAQ:SGI), and LSI Industries, Inc. (NASDAQ:LYTS). All of these stocks’ market caps match NVTA’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As you can see these stocks had an average of 9.5 hedge funds with bullish positions and the average amount invested in these stocks was $32 million. That figure was $99 million in NVTA’s case. Silicon Graphics International Corp (NASDAQ:SGI) is the most popular stock in this table. On the other hand Gafisa SA (ADR) (NYSE:GFA) is the least popular one with only 3 bullish hedge fund positions. InVitae Corp (NYSE:NVTA) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard SGI might be a better candidate to consider taking a long position in.