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The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 887 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of December 31st, 2020. What do these smart investors think about Cytokinetics, Inc. (NASDAQ:CYTK)?
Is CYTK stock a buy? Hedge fund interest in Cytokinetics, Inc. (NASDAQ:CYTK) shares was flat at the end of last quarter. This is usually a negative indicator. Our calculations also showed that CYTK isn't among the 30 most popular stocks among hedge funds (click for Q4 rankings). At the end of this article we will also compare CYTK to other stocks including Mesa Laboratories, Inc. (NASDAQ:MLAB), Marcus & Millichap Inc (NYSE:MMI), and Surgery Partners, Inc. (NASDAQ:SGRY) to get a better sense of its popularity.
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 124 percentage points since March 2017 (see the details here).
Richard Driehaus of Driehaus Capital
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the CBD market is growing at a 33% annualized rate, so we are taking a closer look at this under-the-radar hemp stock. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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. Now let's analyze the recent hedge fund action encompassing Cytokinetics, Inc. (NASDAQ:CYTK).
Do Hedge Funds Think CYTK Is A Good Stock To Buy Now?
At Q4's end, a total of 26 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards CYTK over the last 22 quarters. With the smart money's positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
The largest stake in Cytokinetics, Inc. (NASDAQ:CYTK) was held by Biotechnology Value Fund / BVF Inc, which reported holding $101.4 million worth of stock at the end of December. It was followed by Polar Capital with a $68 million position. Other investors bullish on the company included Driehaus Capital, Deerfield Management, and Farallon Capital. In terms of the portfolio weights assigned to each position Biotechnology Value Fund / BVF Inc allocated the biggest weight to Cytokinetics, Inc. (NASDAQ:CYTK), around 3.99% of its 13F portfolio. Burrage Capital Management is also relatively very bullish on the stock, setting aside 3.9 percent of its 13F equity portfolio to CYTK.
Seeing as Cytokinetics, Inc. (NASDAQ:CYTK) has faced bearish sentiment from the aggregate hedge fund industry, it's easy to see that there is a sect of hedge funds that elected to cut their full holdings by the end of the fourth quarter. Interestingly, Joseph Edelman's Perceptive Advisors dumped the biggest stake of the "upper crust" of funds followed by Insider Monkey, valued at an estimated $218.3 million in stock, and Jeffrey Jay and David Kroin's Great Point Partners was right behind this move, as the fund said goodbye to about $55.2 million worth. These moves are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's check out hedge fund activity in other stocks similar to Cytokinetics, Inc. (NASDAQ:CYTK). We will take a look at Mesa Laboratories, Inc. (NASDAQ:MLAB), Marcus & Millichap Inc (NYSE:MMI), Surgery Partners, Inc. (NASDAQ:SGRY), Antero Resources Corp (NYSE:AR), HighPeak Energy, Inc. (NASDAQ:HPK), Heartland Express, Inc. (NASDAQ:HTLD), and Century Communities, Inc (NYSE:CCS). This group of stocks' market valuations match CYTK's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MLAB,10,111047,2 MMI,9,78671,4 SGRY,15,173190,2 AR,31,285131,10 HPK,1,64,0 HTLD,13,47437,-2 CCS,18,107648,-2 Average,13.9,114741,2 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.9 hedge funds with bullish positions and the average amount invested in these stocks was $115 million. That figure was $500 million in CYTK's case. Antero Resources Corp (NYSE:AR) is the most popular stock in this table. On the other hand HighPeak Energy, Inc. (NASDAQ:HPK) is the least popular one with only 1 bullish hedge fund positions. Cytokinetics, Inc. (NASDAQ:CYTK) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CYTK is 76.7. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.3% in 2021 through April 19th and still beat the market by 0.9 percentage points. Hedge funds were also right about betting on CYTK as the stock returned 19% since the end of Q4 (through 4/19) 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.