With the third-quarter round of 13F filings behind us it is time to take a look at the stocks in which some of the best money managers in the world preferred to invest or sell heading into the fourth quarter. One of these stocks was USANA Health Sciences, Inc. (NYSE:USNA).
Is USNA a good stock to buy now? USANA Health Sciences, Inc. (NYSE:USNA) has seen a decrease in enthusiasm from smart money in recent months. USANA Health Sciences, Inc. (NYSE:USNA) was in 18 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 22. There were 19 hedge funds in our database with USNA positions at the end of the second quarter. Our calculations also showed that USNA 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.
Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings 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’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 17th. That’s why we believe hedge fund sentiment is an extremely 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. Keeping this in mind we’re going to take a peek at the new hedge fund action surrounding USANA Health Sciences, Inc. (NYSE:USNA).
Do Hedge Funds Think USNA Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 18 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -5% from the previous quarter. The graph below displays the number of hedge funds with bullish position in USNA over the last 21 quarters. With the smart money’s sentiment swirling, there exists a select group of key hedge fund managers who were boosting their stakes meaningfully (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Renaissance Technologies, holds the number one position in USANA Health Sciences, Inc. (NYSE:USNA). Renaissance Technologies has a $132.2 million position in the stock, comprising 0.1% of its 13F portfolio. The second most bullish fund manager is Arrowstreet Capital, led by Peter Rathjens, Bruce Clarke and John Campbell, holding a $15.8 million position; less than 0.1%% of its 13F portfolio is allocated to the stock. Remaining professional money managers that are bullish consist of D. E. Shaw’s D E Shaw, Noam Gottesman’s GLG Partners and John Overdeck and David Siegel’s Two Sigma Advisors. In terms of the portfolio weights assigned to each position Zebra Capital Management allocated the biggest weight to USANA Health Sciences, Inc. (NYSE:USNA), around 0.4% of its 13F portfolio. Renaissance Technologies is also relatively very bullish on the stock, setting aside 0.13 percent of its 13F equity portfolio to USNA.
Judging by the fact that USANA Health Sciences, Inc. (NYSE:USNA) has experienced falling interest from the entirety of the hedge funds we track, we can see that there were a few money managers who were dropping their positions entirely in the third quarter. At the top of the heap, Michael Gelband’s ExodusPoint Capital said goodbye to the biggest position of the 750 funds tracked by Insider Monkey, totaling close to $1.5 million in stock, and Jinghua Yan’s TwinBeech Capital was right behind this move, as the fund dumped about $0.4 million worth. These moves are interesting, as total hedge fund interest was cut by 1 funds in the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as USANA Health Sciences, Inc. (NYSE:USNA) but similarly valued. We will take a look at Baozun Inc (NASDAQ:BZUN), SeaWorld Entertainment Inc (NYSE:SEAS), Mueller Industries, Inc. (NYSE:MLI), Viela Bio, Inc. (NASDAQ:VIE), Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB), Sapiens International Corporation N.V. (NASDAQ:SPNS), and MAG Silver Corporation (NYSE:MAG). This group of stocks’ market valuations resemble USNA’s market valuation.
|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 15.6 hedge funds with bullish positions and the average amount invested in these stocks was $227 million. That figure was $203 million in USNA’s case. SeaWorld Entertainment Inc (NYSE:SEAS) is the most popular stock in this table. On the other hand Viela Bio, Inc. (NASDAQ:VIE) is the least popular one with only 5 bullish hedge fund positions. USANA Health Sciences, Inc. (NYSE:USNA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for USNA is 52.6. 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 USNA wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on USNA were disappointed as the stock returned 2.2% 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.
Follow Usana Health Sciences Inc (NYSE:USNA)
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Disclosure: None. This article was originally published at Insider Monkey.