Before we spend days researching a stock idea we’d like to take a look at how hedge funds and billionaire investors recently traded that stock. S&P 500 Index returned about 5.2% during the last 12 months ending October 30, 2015. Less than 49% of the stocks in the index outperformed the index. This means you (or a monkey throwing a dart) have less than an even chance of beating the market by randomly picking a stock. On the other hand, the top 30 S&P 500 stocks among hedge funds at the end of September 2014 had an average return of 9.5% during the same period. Sixty-three percent of these 30 stocks outperformed the market. Hedge funds had bad stock picks like everyone else. Micron, which lost 50% over this period, was one of hedge funds’ 30 favorite S&P 500 stocks. Anadarko Petroleum was another failed stock pick which lost more than 26%. So, taking cues from hedge funds isn’t a foolproof strategy, but it seems to work on average. In this article, we will take a look at what hedge funds think about Versartic Inc (NASDAQ:VSAR).
Is Versartic Inc (NASDAQ:VSAR) ready to rally soon? The best stock pickers are betting on the stock. The number of bullish hedge fund positions advanced by 2 lately. At the end of this article we will also compare VSAR to other stocks including Everi Holdings Inc (NYSE:EVRI), American Vanguard Corp. (NYSE:AVD), and Enova International Inc (NYSE:ENVA) to get a better sense of its popularity.
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Today there are dozens of methods stock traders put to use to size up stocks. Some of the less known methods are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the top fund managers can beat the broader indices by a healthy amount (see the details here).
Keeping this in mind, let’s view the recent action surrounding Versartic Inc (NASDAQ:VSAR).
How are hedge funds trading Versartic Inc (NASDAQ:VSAR)?
At Q3’s end, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 20% from the previous quarter. With the smart money’s capital changing hands, there exists a select group of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Julian Baker and Felix Baker’s Baker Bros. Advisors has the most valuable position in Versartic Inc (NASDAQ:VSAR), worth close to $37.4 million, accounting for 0.3% of its total 13F portfolio. The second most bullish fund manager is Perceptive Advisors, led by Joseph Edelman, holding an $26.7 million position; 2.1% of its 13F portfolio is allocated to the company. Some other hedge funds and institutional investors that hold long positions include Dennis Purcell’s Aisling Capital, Mark Kingdon’s Kingdon Capital and Ken Griffin’s Citadel Investment Group.
As industrywide interest jumped, key hedge funds have jumped into Versartic Inc (NASDAQ:VSAR) headfirst. Deerfield Management, managed by James E. Flynn, initiated a position in Versartic Inc (NASDAQ:VSAR). Deerfield Management had $3.2 million invested in the company at the end of the quarter. Steve Cohen’s Point72 Asset Management also made an $1.2 million investment in the stock during the quarter. The following funds were also among the new VSAR investors: Chuck Royce’s Royce & Associates, Israel Englander’s Millennium Management, and Clifford Fox’s Columbus Circle Investors.
Let’s check out hedge fund activity in other stocks similar to Versartic Inc (NASDAQ:VSAR). We will take a look at Everi Holdings Inc (NYSE:EVRI), American Vanguard Corp. (NYSE:AVD), Enova International Inc (NYSE:ENVA), and First Bancorp (NASDAQ:FBNC). All of these stocks’ market caps resemble VSAR’s market cap.
|Ticker||No of HFs with positions||Total Value of HF Positions (x1000)||Change in HF Position|
As yAs you can see these stocks had an average of 11 hedge funds with bullish positions and the average amount invested in these stocks was $50 million. That figure was $110 million in VSAR’s case. Everi Holdings Inc (NYSE:EVRI) is the most popular stock in this table. On the other hand, American Vanguard Corp. (NYSE:AVD)) is the least popular one with only 6 bullish hedge fund positions. In comparison, Versartic Inc (NASDAQ: VSAR) is not the most popular, but it has succeeded in attracting attention from investors. This may be a good sign, but we’d rather spend our time researching stocks that hedge funds are collectively most bullish on. In this regard, EVRI might be a better candidate to consider a long position.