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Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 817 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Accelerate Diagnostics Inc (NASDAQ:AXDX), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is AXDX a good stock to buy now? Accelerate Diagnostics Inc (NASDAQ:AXDX) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 13 hedge funds' portfolios at the end of September. Our calculations also showed that AXDX 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). The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Amyris Inc (NASDAQ:AMRS), Meredith Corporation (NYSE:MDP), and Cara Therapeutics Inc (NASDAQ:CARA) to gather more data points.
Video: Watch our video about the top 5 most popular hedge fund stocks.
At the moment there are several tools shareholders can use to grade stocks. A duo of the less utilized tools are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the best investment managers can beat their index-focused peers by a significant amount (see the details here).
Matthew Strobeck of Birchview Capital
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. With all of this in mind let's analyze the fresh hedge fund action regarding Accelerate Diagnostics Inc (NASDAQ:AXDX).
Do Hedge Funds Think AXDX Is A Good Stock To Buy Now?
Heading into the fourth quarter of 2020, a total of 13 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. On the other hand, there were a total of 6 hedge funds with a bullish position in AXDX a year ago. With hedgies' capital changing hands, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
More specifically, Birchview Capital was the largest shareholder of Accelerate Diagnostics Inc (NASDAQ:AXDX), with a stake worth $23.4 million reported as of the end of September. Trailing Birchview Capital was Selkirk Management, which amassed a stake valued at $3.7 million. Cadian Capital, Renaissance Technologies, and Tudor Investment Corp were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Birchview Capital allocated the biggest weight to Accelerate Diagnostics Inc (NASDAQ:AXDX), around 15.62% of its 13F portfolio. Selkirk Management is also relatively very bullish on the stock, designating 1.18 percent of its 13F equity portfolio to AXDX.
Judging by the fact that Accelerate Diagnostics Inc (NASDAQ:AXDX) has witnessed falling interest from the entirety of the hedge funds we track, it's safe to say that there was a specific group of fund managers that slashed their entire stakes last quarter. At the top of the heap, Richard Mashaal's Rima Senvest Management dumped the biggest position of the 750 funds followed by Insider Monkey, totaling an estimated $4 million in stock. John M. Angelo and Michael L. Gordon's fund, Angelo Gordon & Co, also sold off its stock, about $2.8 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Accelerate Diagnostics Inc (NASDAQ:AXDX) but similarly valued. We will take a look at Amyris Inc (NASDAQ:AMRS), Meredith Corporation (NYSE:MDP), Cara Therapeutics Inc (NASDAQ:CARA), Passage Bio, Inc. (NASDAQ:PASG), 3D Systems Corporation (NYSE:DDD), Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI), and Diebold Nixdorf Incorporated (NYSE:DBD). This group of stocks' market valuations resemble AXDX's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AMRS,11,124955,-5 MDP,18,162681,-2 CARA,19,75686,1 PASG,15,221636,2 DDD,15,33448,-3 SPPI,13,57477,3 DBD,15,125411,-1 Average,15.1,114471,-0.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 15.1 hedge funds with bullish positions and the average amount invested in these stocks was $114 million. That figure was $31 million in AXDX's case. Cara Therapeutics Inc (NASDAQ:CARA) is the most popular stock in this table. On the other hand Amyris Inc (NASDAQ:AMRS) is the least popular one with only 11 bullish hedge fund positions. Accelerate Diagnostics Inc (NASDAQ:AXDX) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for AXDX is 38. 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 negative signal and 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 32.9% in 2020 through December 8th and surpassed the market again by 16.2 percentage points. Unfortunately AXDX wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); AXDX investors were disappointed as the stock returned -30.5% since the end of September (through 12/8) 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 most of these stocks already outperformed the market in 2020.
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Disclosure: None. This article was originally published at Insider Monkey.