Is InVitae Corp (NVTA) Going to Burn These Hedge Funds?

Seeing as InVitae Corp (NYSE:NVTA) has experienced a bearish sentiment from the smart money, it’s safe to say that there was a specific group of hedgies that slashed their entire stakes by the end of the third quarter. At the top of the heap, Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management cut the biggest investment of all the hedgies watched by Insider Monkey, valued at close to $13.8 million in stock. Peter Muller’s fund, PDT Partners, also sold off its stock, about $0.2 million worth. These moves are interesting, as aggregate hedge fund interest dropped by 2 funds by the end of the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as InVitae Corp (NYSE:NVTA) but similarly valued. We will take a look at Garrison Capital Inc (NASDAQ:GARS), Heritage-Crystal Clean, Inc. (NASDAQ:HCCI), Proteon Therapeutics Inc (NASDAQ:PRTO), and Hawaiian Telcom HoldCo Inc (NASDAQ:HCOM). This group of stocks’ market valuations are similar to NVTA’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
GARS 5 2835 -1
HCCI 4 34482 0
PRTO 4 46207 0
HCOM 8 25759 1

As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $27 million, compared to $72 million in NVTA’s case. Hawaiian Telcom HoldCo Inc (NASDAQ:HCOM) is the most popular stock in this table, while Heritage-Crystal Clean, Inc. (NASDAQ:HCCI) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks, InVitae Corp (NYSE:NVTA) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.