The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. In this article we are going to take a look at smart money sentiment towards Personalis, Inc. (NASDAQ:PSNL).
Is PSNL a good stock to buy now? Hedge funds were in a bullish mood. The number of long hedge fund positions increased by 3 in recent months. Personalis, Inc. (NASDAQ:PSNL) was in 11 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 17. Our calculations also showed that PSNL 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.
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 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.
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 take a look at the latest hedge fund action surrounding Personalis, Inc. (NASDAQ:PSNL).
Do Hedge Funds Think PSNL Is A Good Stock To Buy Now?
At the end of September, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 38% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PSNL over the last 21 quarters. With hedge funds’ sentiment swirling, there exists a select group of key hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
More specifically, Alyeska Investment Group was the largest shareholder of Personalis, Inc. (NASDAQ:PSNL), with a stake worth $24.4 million reported as of the end of September. Trailing Alyeska Investment Group was Pura Vida Investments, which amassed a stake valued at $11.5 million. Citadel Investment Group, Millennium Management, and Engineers Gate Manager 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 Pura Vida Investments allocated the biggest weight to Personalis, Inc. (NASDAQ:PSNL), around 0.59% of its 13F portfolio. Alyeska Investment Group is also relatively very bullish on the stock, dishing out 0.37 percent of its 13F equity portfolio to PSNL.
As aggregate interest increased, some big names have been driving this bullishness. Parian Global Management, managed by Zachary Miller, assembled the largest position in Personalis, Inc. (NASDAQ:PSNL). Parian Global Management had $1 million invested in the company at the end of the quarter. Louis Bacon’s Moore Global Investments also made a $0.7 million investment in the stock during the quarter. The other funds with brand new PSNL positions are Joseph Edelman’s Perceptive Advisors, Peter Muller’s PDT Partners, and Renaissance Technologies.
Let’s now review hedge fund activity in other stocks similar to Personalis, Inc. (NASDAQ:PSNL). These stocks are Stratasys, Ltd. (NASDAQ:SSYS), Echo Global Logistics, Inc. (NASDAQ:ECHO), Great Western Bancorp Inc (NYSE:GWB), PBF Energy Inc (NYSE:PBF), PDF Solutions, Inc. (NASDAQ:PDFS), Brookline Bancorp, Inc. (NASDAQ:BRKL), and Oaktree Specialty Lending Corporation (NASDAQ:OCSL). This group of stocks’ market values match PSNL’s market value.
|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 13.9 hedge funds with bullish positions and the average amount invested in these stocks was $41 million. That figure was $51 million in PSNL’s case. Stratasys, Ltd. (NASDAQ:SSYS) is the most popular stock in this table. On the other hand PDF Solutions, Inc. (NASDAQ:PDFS) is the least popular one with only 10 bullish hedge fund positions. Personalis, Inc. (NASDAQ:PSNL) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for PSNL is 35.7. 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 PSNL as the stock returned 58.9% 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.