After several tireless days we have finished crunching the numbers from nearly 817 13F filings issued by the elite hedge funds and other investment firms that we track at Insider Monkey, which disclosed those firms’ equity portfolios as of September 30th. The results of that effort will be put on display in this article, as we share valuable insight into the smart money sentiment towards SC Health Corporation (NYSE:SCPE).
Is SCPE a good stock to buy now? SC Health Corporation (NYSE:SCPE) has seen an increase in activity from the world’s largest hedge funds lately. SC Health Corporation (NYSE:SCPE) was in 15 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 17. There were 14 hedge funds in our database with SCPE holdings at the end of June. Our calculations also showed that SCPE 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.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
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. Now we’re going to take a glance at the new hedge fund action regarding SC Health Corporation (NYSE:SCPE).
Do Hedge Funds Think SCPE Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 15 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 7% from the second quarter of 2020. The graph below displays the number of hedge funds with bullish position in SCPE over the last 21 quarters. With hedgies’ capital changing hands, there exists an “upper tier” of noteworthy hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
The largest stake in SC Health Corporation (NYSE:SCPE) was held by Glazer Capital, which reported holding $21.2 million worth of stock at the end of September. It was followed by Perceptive Advisors with a $10.6 million position. Other investors bullish on the company included Hudson Bay Capital Management, Moore Global Investments, and Hudson Bay Capital Management. In terms of the portfolio weights assigned to each position Glazer Capital allocated the biggest weight to SC Health Corporation (NYSE:SCPE), around 1.03% of its 13F portfolio. Bulldog Investors is also relatively very bullish on the stock, dishing out 0.27 percent of its 13F equity portfolio to SCPE.
Now, some big names were leading the bulls’ herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, created the largest position in SC Health Corporation (NYSE:SCPE). Marshall Wace LLP had $4 million invested in the company at the end of the quarter. Boaz Weinstein’s Saba Capital also made a $3.4 million investment in the stock during the quarter. The only other fund with a brand new SCPE position is Paul Marshall and Ian Wace’s Marshall Wace LLP.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as SC Health Corporation (NYSE:SCPE) but similarly valued. We will take a look at American National BankShares Inc (NASDAQ:AMNB), GigCapital2, Inc. (NYSE:GIX), Nature’s Sunshine Products Inc (NASDAQ:NATR), Teekay Corporation (NYSE:TK), KalVista Pharmaceuticals, Inc. (NASDAQ:KALV), Genfit SA (NASDAQ:GNFT), and Galera Therapeutics, Inc. (NASDAQ:GRTX). This group of stocks’ market values are closest to SCPE’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 8.3 hedge funds with bullish positions and the average amount invested in these stocks was $40 million. That figure was $76 million in SCPE’s case. KalVista Pharmaceuticals, Inc. (NASDAQ:KALV) is the most popular stock in this table. On the other hand Genfit SA (NASDAQ:GNFT) is the least popular one with only 1 bullish hedge fund positions. SC Health Corporation (NYSE:SCPE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for SCPE is 82.5. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 30.7% in 2020 through December 14th and beat the market again by 15.8 percentage points. Unfortunately SCPE wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on SCPE were disappointed as the stock returned 1.1% since the end of September (through 12/14) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.