Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Nurix Therapeutics, Inc. (NASDAQ:NRIX), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is NRIX a good stock to buy now? Prominent investors were getting more optimistic. The number of long hedge fund positions moved up by 12 recently. Nurix Therapeutics, Inc. (NASDAQ:NRIX) was in 12 hedge funds’ portfolios at the end of the third quarter of 2020. Our calculations also showed that NRIX 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.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 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 underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in stocks that are in our short portfolio.
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. With all of this in mind let’s take a glance at the key hedge fund action regarding Nurix Therapeutics, Inc. (NASDAQ:NRIX).
Do Hedge Funds Think NRIX Is A Good Stock To Buy Now?
At the end of September, a total of 12 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 12 from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards NRIX over the last 21 quarters. 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, Redmile Group was the largest shareholder of Nurix Therapeutics, Inc. (NASDAQ:NRIX), with a stake worth $90.5 million reported as of the end of September. Trailing Redmile Group was Baker Bros. Advisors, which amassed a stake valued at $62.5 million. EcoR1 Capital, Harvard Management Co, and OrbiMed Advisors 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 EcoR1 Capital allocated the biggest weight to Nurix Therapeutics, Inc. (NASDAQ:NRIX), around 2.97% of its 13F portfolio. Redmile Group is also relatively very bullish on the stock, dishing out 1.66 percent of its 13F equity portfolio to NRIX.
Consequently, specific money managers were leading the bulls’ herd. Redmile Group, managed by Jeremy Green, initiated the biggest position in Nurix Therapeutics, Inc. (NASDAQ:NRIX). Redmile Group had $90.5 million invested in the company at the end of the quarter. Julian Baker and Felix Baker’s Baker Bros. Advisors also made a $62.5 million investment in the stock during the quarter. The following funds were also among the new NRIX investors: Oleg Nodelman’s EcoR1 Capital, Rick Slocum’s Harvard Management Co, and OrbiMed Advisors.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Nurix Therapeutics, Inc. (NASDAQ:NRIX) but similarly valued. We will take a look at Weis Markets, Inc. (NYSE:WMK), Arbor Realty Trust, Inc. (NYSE:ABR), AMC Networks Inc (NASDAQ:AMCX), Frontline Ltd (NYSE:FRO), WW International, Inc. (NASDAQ:WW), Alamo Group, Inc. (NYSE:ALG), and Vasta Platform Limited (NASDAQ:VSTA). This group of stocks’ market caps are similar to NRIX’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.4 hedge funds with bullish positions and the average amount invested in these stocks was $108 million. That figure was $250 million in NRIX’s case. AMC Networks Inc (NASDAQ:AMCX) is the most popular stock in this table. On the other hand Vasta Platform Limited (NASDAQ:VSTA) is the least popular one with only 8 bullish hedge fund positions. Nurix Therapeutics, Inc. (NASDAQ:NRIX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for NRIX is 26. 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 NRIX as the stock returned 28.4% since the end of the third quarter (through 12/8) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.