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Hedge Funds Aren’t Crazy About Vitru Limited (VTRU) Anymore

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In this article you are going to find out whether hedge funds think Vitru Limited (NASDAQ:VTRU) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It's not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Is Vitru Limited (NASDAQ:VTRU) a buy, sell, or hold? The smart money was selling. The number of long hedge fund bets went down by 3 in recent months. Vitru Limited (NASDAQ:VTRU) was in 3 hedge funds' portfolios at the end of March. The all time high for this statistic is 9. Our calculations also showed that VTRU isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 6 hedge funds in our database with VTRU positions at the end of the fourth quarter.

Today there are tons of methods market participants use to size up their holdings. A couple of the best methods are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can outpace the S&P 500 by a significant amount (see the details here). 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 .

Izzy Englander of MILLENNIUM MANAGEMENT
Izzy Englander of MILLENNIUM MANAGEMENT

Israel Englander of Millennium Management

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund wants to buy this $28 biotech stock for $50. So, we recommended a long position to our monthly premium newsletter subscribers. 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. With all of this in mind let's take a glance at the latest hedge fund action surrounding Vitru Limited (NASDAQ:VTRU).

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

Heading into the second quarter of 2021, a total of 3 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -50% from the previous quarter. On the other hand, there were a total of 0 hedge funds with a bullish position in VTRU a year ago. With hedgies' sentiment swirling, there exists an "upper tier" of key hedge fund managers who were increasing their stakes substantially (or already accumulated large positions).

The largest stake in Vitru Limited (NASDAQ:VTRU) was held by Alyeska Investment Group, which reported holding $6.3 million worth of stock at the end of December. It was followed by Millennium Management with a $1.7 million position. The only other hedge fund that is bullish on the company was CaaS Capital.

Seeing as Vitru Limited (NASDAQ:VTRU) has witnessed declining sentiment from the aggregate hedge fund industry, it's easy to see that there lies a certain "tier" of funds that decided to sell off their positions entirely heading into Q2. It's worth mentioning that Ken Griffin's Citadel Investment Group said goodbye to the biggest stake of the "upper crust" of funds monitored by Insider Monkey, totaling about $1.1 million in stock. Paul Marshall and Ian Wace's fund, Marshall Wace LLP, also cut its stock, about $0.6 million worth. These bearish behaviors are interesting, as total hedge fund interest fell by 3 funds heading into Q2.

Let's now review hedge fund activity in other stocks - not necessarily in the same industry as Vitru Limited (NASDAQ:VTRU) but similarly valued. These stocks are Viracta Therapeutics, Inc. (NASDAQ:VIRX), Nanobiotix S.A. (NASDAQ:NBTX), Misonix, Inc. (NASDAQ:MSON), Century Bancorp, Inc. (NASDAQ:CNBKA), INDUS Realty Trust, Inc. (NASDAQ:INDT), Innate Pharma S.A. (NASDAQ:IPHA), and Naked Brand Group Limited (NASDAQ:NAKD). This group of stocks' market caps are closest to VTRU's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position VIRX,13,65765,8 NBTX,5,36041,-1 MSON,7,46305,-2 CNBKA,4,18875,0 INDT,8,86852,4 IPHA,2,323,1 NAKD,4,206,3 Average,6.1,36338,1.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 6.1 hedge funds with bullish positions and the average amount invested in these stocks was $36 million. That figure was $9 million in VTRU's case. Viracta Therapeutics, Inc. (NASDAQ:VIRX) is the most popular stock in this table. On the other hand Innate Pharma S.A. (NASDAQ:IPHA) is the least popular one with only 2 bullish hedge fund positions. Vitru Limited (NASDAQ:VTRU) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for VTRU is 16.5. 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 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 17.2% in 2021 through June 11th and still beat the market by 3.3 percentage points. A small number of hedge funds were also right about betting on VTRU as the stock returned 11.1% since the end of the first quarter (through 6/11) and outperformed the market by an even larger margin.

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

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