Is VXRT A Good Stock To Buy Now?

A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended September 30, so let’s proceed with the discussion of the hedge fund sentiment on Vaxart, Inc. (NASDAQ:VXRT).

Is VXRT a good stock to buy now? Vaxart, Inc. (NASDAQ:VXRT) was in 12 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistics is 7. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. VXRT shareholders have witnessed an increase in hedge fund interest in recent months. There were 7 hedge funds in our database with VXRT holdings at the end of June. Our calculations also showed that VXRT 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 was 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’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.

Felix Baker - Baker Bros.

Felix Baker of Baker Bros.

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 let’s go over the recent hedge fund action encompassing Vaxart, Inc. (NASDAQ:VXRT).

Do Hedge Funds Think VXRT Is A Good Stock To Buy Now?

At third quarter’s end, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 71% from the second quarter of 2020. On the other hand, there were a total of 4 hedge funds with a bullish position in VXRT a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

The largest stake in Vaxart, Inc. (NASDAQ:VXRT) was held by RA Capital Management, which reported holding $71.9 million worth of stock at the end of September. It was followed by Baker Bros. Advisors with a $10.4 million position. Other investors bullish on the company included Arrowstreet Capital, Citadel Investment Group, and GMT Capital. In terms of the portfolio weights assigned to each position RA Capital Management allocated the biggest weight to Vaxart, Inc. (NASDAQ:VXRT), around 1.31% of its 13F portfolio. GMT Capital is also relatively very bullish on the stock, earmarking 0.22 percent of its 13F equity portfolio to VXRT.

Now, some big names were breaking ground themselves. RA Capital Management, managed by Peter Kolchinsky, initiated the biggest position in Vaxart, Inc. (NASDAQ:VXRT). RA Capital Management had $71.9 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $8 million investment in the stock during the quarter. The following funds were also among the new VXRT investors: Thomas E. Claugus’s GMT Capital, Daniel S. Och’s OZ Management, and David Harding’s Winton Capital Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Vaxart, Inc. (NASDAQ:VXRT) but similarly valued. We will take a look at OneSmart International Education Group Limited (NYSE:ONE), Provention Bio, Inc. (NASDAQ:PRVB), Dave & Buster’s Entertainment, Inc. (NASDAQ:PLAY), XPEL Inc. (NASDAQ:XPEL), Protagonist Therapeutics, Inc. (NASDAQ:PTGX), Cohu, Inc. (NASDAQ:COHU), and German American Bancorp., Inc. (NASDAQ:GABC). This group of stocks’ market caps are similar to VXRT’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
ONE 20 169705 14
PRVB 10 83998 -4
PLAY 16 202166 4
XPEL 12 16036 8
PTGX 13 276569 2
COHU 8 47643 -4
GABC 4 12514 0
Average 11.9 115519 2.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.9 hedge funds with bullish positions and the average amount invested in these stocks was $116 million. That figure was $100 million in VXRT’s case. OneSmart International Education Group Limited (NYSE:ONE) is the most popular stock in this table. On the other hand German American Bancorp., Inc. (NASDAQ:GABC) is the least popular one with only 4 bullish hedge fund positions. Vaxart, Inc. (NASDAQ:VXRT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VXRT is 65. 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. Hedge funds were also right about betting on VXRT as the stock returned 16.2% since the end of Q3 (through 12/8) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

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Disclosure: None. This article was originally published at Insider Monkey.