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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. We at Insider Monkey have plowed through 873 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds' and investors' portfolio positions as of June 30th. In this article we look at what those investors think of Accolade, Inc. (NASDAQ:ACCD).
Accolade, Inc. (NASDAQ:ACCD) was in 24 hedge funds' portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 21. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. ACCD shareholders have witnessed an increase in enthusiasm from smart money in recent months. There were 19 hedge funds in our database with ACCD positions at the end of the first quarter. Our calculations also showed that ACCD isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).
According to most stock holders, hedge funds are assumed to be unimportant, outdated investment vehicles of the past. While there are over 8000 funds trading today, We look at the aristocrats of this club, approximately 850 funds. These money managers shepherd the lion's share of the smart money's total capital, and by tailing their unrivaled picks, Insider Monkey has unsheathed several investment strategies that have historically outpaced the S&P 500 index. Insider Monkey's flagship short hedge fund strategy outstripped the S&P 500 short ETFs by around 20 percentage points per year since its inception in March 2017. Also, our monthly newsletter's portfolio of long stock picks returned 185.4% since March 2017 (through August 2021) and beat the S&P 500 Index by more than 79 percentage points. You can download a sample issue of this newsletter on our website.
Henrik Rhenman of Rhenman & Partners Asset Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV 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 gander at the recent hedge fund action regarding Accolade, Inc. (NASDAQ:ACCD).
Do Hedge Funds Think ACCD Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 24 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 26% from the first quarter of 2020. By comparison, 0 hedge funds held shares or bullish call options in ACCD a year ago. With hedgies' positions undergoing their usual ebb and flow, there exists a few key hedge fund managers who were upping their holdings substantially (or already accumulated large positions).
More specifically, ARK Investment Management was the largest shareholder of Accolade, Inc. (NASDAQ:ACCD), with a stake worth $294.2 million reported as of the end of June. Trailing ARK Investment Management was Select Equity Group, which amassed a stake valued at $150.6 million. Rock Springs Capital Management, Rhenman & Partners Asset Management, and Perceptive Advisors 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 Cumberland Associates / Springowl Associates allocated the biggest weight to Accolade, Inc. (NASDAQ:ACCD), around 9.53% of its 13F portfolio. Copernicus Capital Management is also relatively very bullish on the stock, designating 5.99 percent of its 13F equity portfolio to ACCD.
As industrywide interest jumped, some big names have jumped into Accolade, Inc. (NASDAQ:ACCD) headfirst. Bridgewater Associates, managed by Ray Dalio, assembled the biggest position in Accolade, Inc. (NASDAQ:ACCD). Bridgewater Associates had $3.2 million invested in the company at the end of the quarter. D. E. Shaw's D E Shaw also initiated a $2.5 million position during the quarter. The other funds with brand new ACCD positions are D. E. Shaw's D E Shaw, Brandon Haley's Holocene Advisors, and David Harding's Winton Capital Management.
Let's now review hedge fund activity in other stocks similar to Accolade, Inc. (NASDAQ:ACCD). These stocks are Onto Innovation Inc. (NYSE:ONTO), SPS Commerce, Inc. (NASDAQ:SPSC), Assured Guaranty Ltd. (NYSE:AGO), White Mountains Insurance Group Ltd (NYSE:WTM), PotlatchDeltic Corporation (NASDAQ:PCH), PagerDuty, Inc. (NYSE:PD), and Meritage Homes Corp (NYSE:MTH). This group of stocks' market values are closest to ACCD's market value.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ONTO,25,325217,7 SPSC,20,152872,0 AGO,11,195023,-11 WTM,17,232444,-2 PCH,28,112587,2 PD,26,656534,2 MTH,20,323510,-3 Average,21,285455,-0.7 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 21 hedge funds with bullish positions and the average amount invested in these stocks was $285 million. That figure was $595 million in ACCD's case. PotlatchDeltic Corporation (NASDAQ:PCH) is the most popular stock in this table. On the other hand Assured Guaranty Ltd. (NYSE:AGO) is the least popular one with only 11 bullish hedge fund positions. Accolade, Inc. (NASDAQ:ACCD) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ACCD is 78.2. 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 positive signal but 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 24% in 2021 through October 22nd and beat the market again by 1.6 percentage points. Unfortunately ACCD wasn't nearly as popular as these 5 stocks and hedge funds that were betting on ACCD were disappointed as the stock returned -28.2% since the end of June (through 10/22) 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 many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.