Veracyte Inc (NASDAQ:VCYT) shares climbed as high as $12.13 per share on Friday as the firm announced that it has signed a deal with Aetna Inc. (NYSE:AET) which will come into effect on July 1 to become a part of the latter’s laboratory network. Shares ended the day up by nearly 7%. Veracyte Inc is a molecular diagnostics firm which specializes in the molecular cytology field. Its flagship product is the Afirma Thyroid FNA analysis, which is a test that is part of a thyroid cancer diagnosis when benign thyroid nodules among those deemed unclassified by cytopathology need to be identified. BTIG Research also reaffirmed its rating of “Buy” on the stock in a note on Thursday. BTIG has a price target of $13 on the stock. The company’s shares slid 2.95% on Thursday to a closing price of $11.18 per share. Year-to-date, the stock has increased 25.53% in value. For the past one-year period, however, the company’s shares have declined by 31.71%.
The renewed positivity of the market today mirrors that of hedge fund sentiment on the stock, in terms of number of hedge funds with long positions in the company. At the end of the first quarter, a total of seven of the hedge funds tracked by Insider Monkey were bullish in this stock, a change of 17% from the fourth quarter. However, bearish sentiment can be seen in the total value of holdings going down by 37.63% to about $13 million during the first quarter from about $20.84 million at the end of the previous quarter. Even factoring in the share price decline of 24.64% in the first quarter, there was a small pullback in the stock from top money managers.
We pay attention to hedge funds’ moves because our research have shown that hedge funds are extremely talented at picking stocks on the long side of their portfolios. It is true that hedge fund investors have been underperforming the market in recent years. However, this was mainly because hedge funds’ short stock picks lost a ton of money during the bull market that started in March 2009. Hedge fund investors also paid an arm and a leg for the services that they received. We have been tracking the performance of hedge funds’ 15 most popular stock picks in real time since the end of August 2012. These stocks returned 142% since then and outperformed the S&P 500 Index by 84 percentage points (see more details here). That’s why we believe it is important to pay attention to hedge fund sentiment. Plus, we also don’t like paying huge fees.
Insider Monkey additionally tracks insider sentiment in the form of share sales or share purchases. However, there were no recorded sales or purchases of Veracyte Inc shares by insiders in the first half of the year. Taking this into account, let us examine how hedge funds have been trading shares of the company recently.
How have hedgies been trading Veracyte Inc (NASDAQ:VCYT)?
According to our database, Clough Capital Partners, managed by Charles Clough, holds the number one position in Veracyte Inc (NASDAQ:VCYT). Clough Capital Partners has a $7.8 million position of about 1.07 million shares, comprising 0.3% of its 13F portfolio. On Clough Capital Partners’ heels is Consonance Capital Management, managed by Mitchell Blutt, which held a $1.7 million position of 235,860 shares; the fund has 0.2% of its 13F portfolio invested in the stock. Other peers that are bullish consist of Israel Englander’s Millennium Management, Bihua Chen’s Cormorant Asset Management, and Jeffrey Jay and David Kroin’s Great Point Partners.
Consequently, key hedge funds were breaking ground themselves. The aforementioned Consonance Capital Management assembled the biggest new position in Veracyte Inc (NASDAQ:VCYT), as its $1.7 million investment was made entirely in the first quarter.
Due to the new deal with Aetna Inc. (NYSE:AET) and seeing more interest from more hedge funds with long positions in the stock, Veracyte Inc (NASDAQ:VCYT) appears to be a good stock to buy at the moment, though the window to enter may be closing as shares appreciate rapidly, now up by over 50% in the second quarter.