Insider Monkey has processed numerous 13F filings of hedge funds and successful value investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds' and successful investors' positions as of the end of the first quarter. You can find articles about an individual hedge fund's trades on numerous financial news websites. However, in this article we will take a look at their collective moves over the last 4.5 years and analyze what the smart money thinks of Natera Inc (NASDAQ:NTRA) based on that data.
Natera Inc (NASDAQ:NTRA) investors should pay attention to a decrease in support from the world's most elite money managers lately. NTRA was in 32 hedge funds' portfolios at the end of March. There were 33 hedge funds in our database with NTRA positions at the end of the previous quarter. Our calculations also showed that NTRA isn't among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks). Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are many methods stock traders employ to evaluate stocks. A pair of the less known methods are hedge fund and insider trading indicators. We have shown that, historically, those who follow the best picks of the top fund managers can outpace the market by a very impressive margin (see the details here).
[caption id="attachment_364894" align="aligncenter" width="394"] James E. Flynn of Deerfield Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020's unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out trades like this one. We interview hedge fund managers and ask them about their best ideas. If you want to find out the best healthcare stock to buy right now, you can watch our latest hedge fund manager interview here. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. With all of this in mind let's view the recent hedge fund action regarding Natera Inc (NASDAQ:NTRA).
What have hedge funds been doing with Natera Inc (NASDAQ:NTRA)?
At the end of the first quarter, a total of 32 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -3% from the previous quarter. By comparison, 18 hedge funds held shares or bullish call options in NTRA a year ago. With the smart money's positions undergoing their usual ebb and flow, there exists an "upper tier" of notable hedge fund managers who were adding to their holdings meaningfully (or already accumulated large positions).
According to Insider Monkey's hedge fund database, OrbiMed Advisors, managed by Samuel Isaly, holds the most valuable position in Natera Inc (NASDAQ:NTRA). OrbiMed Advisors has a $99.9 million position in the stock, comprising 1.7% of its 13F portfolio. Sitting at the No. 2 spot is Millennium Management, led by Israel Englander, holding a $53.5 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that hold long positions encompass Roberto Mignone's Bridger Management, James E. Flynn's Deerfield Management and Richard Driehaus's Driehaus Capital. In terms of the portfolio weights assigned to each position Foresite Capital allocated the biggest weight to Natera Inc (NASDAQ:NTRA), around 9.93% of its 13F portfolio. Bridger Management is also relatively very bullish on the stock, dishing out 5.37 percent of its 13F equity portfolio to NTRA.
Due to the fact that Natera Inc (NASDAQ:NTRA) has witnessed a decline in interest from hedge fund managers, logic holds that there were a few fund managers who were dropping their full holdings by the end of the first quarter. Interestingly, Kamran Moghtaderi's Eversept Partners cut the biggest stake of all the hedgies tracked by Insider Monkey, worth close to $5.3 million in stock. Efrem Kamen's fund, Pura Vida Investments, also sold off its stock, about $2.6 million worth. These moves are important to note, as total hedge fund interest fell by 1 funds by the end of the first quarter.
Let's go over hedge fund activity in other stocks similar to Natera Inc (NASDAQ:NTRA). These stocks are Wingstop Inc (NASDAQ:WING), Shell Midstream Partners LP (NYSE:SHLX), Thor Industries, Inc. (NYSE:THO), and Arco Platform Limited (NASDAQ:ARCE). All of these stocks' market caps match NTRA's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position WING,27,264265,3 SHLX,4,12962,-4 THO,20,80400,-10 ARCE,16,144545,-1 Average,16.75,125543,-3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 16.75 hedge funds with bullish positions and the average amount invested in these stocks was $126 million. That figure was $393 million in NTRA's case. Wingstop Inc (NASDAQ:WING) is the most popular stock in this table. On the other hand Shell Midstream Partners LP (NYSE:SHLX) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Natera Inc (NASDAQ:NTRA) is more popular among hedge funds. Our calculations showed that top 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks returned 8.3% in 2020 through the end of May but still managed to beat the market by 13.2 percentage points. Hedge funds were also right about betting on NTRA as the stock returned 46.9% so far in Q2 (through the end of May) and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.