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Hedge Funds Aren’t Crazy About USANA Health Sciences, Inc. (USNA) Anymore

·6 min read

In this article we will take a look at whether hedge funds think USANA Health Sciences, Inc. (NYSE:USNA) is a good investment right now. We check hedge fund and billionaire investor sentiment before delving into hours of research. Hedge funds spend millions of dollars on Ivy League graduates, unconventional data sources, expert networks, and get tips from investment bankers and industry insiders. Sure they sometimes fail miserably, but their consensus stock picks historically outperformed the market after adjusting for known risk factors.

Is USANA Health Sciences, Inc. (NYSE:USNA) a buy right now? The smart money was in a bearish mood. The number of long hedge fund positions fell by 3 recently. USANA Health Sciences, Inc. (NYSE:USNA) was in 19 hedge funds' portfolios at the end of the first quarter of 2021. The all time high for this statistic is 22. Our calculations also showed that USNA isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings).

According to most traders, hedge funds are assumed to be slow, outdated financial vehicles of yesteryear. While there are more than 8000 funds in operation at present, Our experts choose to focus on the crème de la crème of this club, around 850 funds. Most estimates calculate that this group of people manage the majority of the hedge fund industry's total capital, and by watching their first-class investments, Insider Monkey has figured out a number of investment strategies that have historically outrun the market. Insider Monkey's flagship short hedge fund strategy outrun the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 206.8% since March 2017 (through May 2021) and beat the S&P 500 Index by more than 115 percentage points. You can download a sample issue of this newsletter on our website .

Bruce Kovner, Caxton Associates LP
Bruce Kovner, Caxton Associates LP

Bruce Kovner of Caxton Associates LP

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. Keeping this in mind we're going to check out the fresh hedge fund action regarding USANA Health Sciences, Inc. (NYSE:USNA).

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

At first quarter's end, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of -14% from the previous quarter. The graph below displays the number of hedge funds with bullish position in USNA over the last 23 quarters. With hedgies' capital changing hands, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).

Is USNA A Good Stock To Buy?
Is USNA A Good Stock To Buy?

The largest stake in USANA Health Sciences, Inc. (NYSE:USNA) was held by Renaissance Technologies, which reported holding $153 million worth of stock at the end of December. It was followed by Arrowstreet Capital with a $22 million position. Other investors bullish on the company included D E Shaw, GLG Partners, and CaaS Capital. In terms of the portfolio weights assigned to each position Prescott Group Capital Management allocated the biggest weight to USANA Health Sciences, Inc. (NYSE:USNA), around 0.74% of its 13F portfolio. Algert Global is also relatively very bullish on the stock, dishing out 0.31 percent of its 13F equity portfolio to USNA.

Seeing as USANA Health Sciences, Inc. (NYSE:USNA) has witnessed bearish sentiment from the entirety of the hedge funds we track, it's easy to see that there exists a select few fund managers who were dropping their positions entirely last quarter. Interestingly, Valerie Malter's Matarin Capital dropped the largest position of all the hedgies monitored by Insider Monkey, worth close to $3.2 million in stock. David Harding's fund, Winton Capital Management, also cut its stock, about $1.7 million worth. These moves are interesting, as total hedge fund interest was cut by 3 funds last quarter.

Let's now review hedge fund activity in other stocks - not necessarily in the same industry as USANA Health Sciences, Inc. (NYSE:USNA) but similarly valued. We will take a look at Century Communities, Inc (NYSE:CCS), The RealReal, Inc. (NASDAQ:REAL), Chesapeake Utilities Corporation (NYSE:CPK), EHang Holdings Limited (NASDAQ:EH), Liberty Oilfield Services Inc. (NYSE:LBRT), bluebird bio Inc (NASDAQ:BLUE), and Talend S.A. (NASDAQ:TLND). This group of stocks' market values resemble USNA's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position CCS,24,123486,6 REAL,24,399233,-8 CPK,6,6692,2 EH,4,7063,2 LBRT,10,41393,2 BLUE,27,226229,-1 TLND,45,1142089,18 Average,20,278026,3 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 20 hedge funds with bullish positions and the average amount invested in these stocks was $278 million. That figure was $250 million in USNA's case. Talend S.A. (NASDAQ:TLND) is the most popular stock in this table. On the other hand EHang Holdings Limited (NASDAQ:EH) is the least popular one with only 4 bullish hedge fund positions. USANA Health Sciences, Inc. (NYSE:USNA) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for USNA is 46.2. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 23.8% in 2021 through July 16th and surpassed the market again by 7.7 percentage points. Unfortunately USNA wasn't nearly as popular as these 5 stocks (hedge fund sentiment was quite bearish); USNA investors were disappointed as the stock returned 2.3% since the end of March (through 7/16) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market in 2021.

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