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 third 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 5 years and analyze what the smart money thinks of Myovant Sciences Ltd. (NYSE:MYOV) based on that data.
Is MYOV a good stock to buy now? Myovant Sciences Ltd. (NYSE:MYOV) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 17 hedge funds' portfolios at the end of the third quarter of 2020. Our calculations also showed that MYOV isn't among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks). The level and the change in hedge fund popularity aren't the only variables you need to analyze to decipher hedge funds' perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That's why at the end of this article we will examine companies such as Silvercorp Metals Inc. (NYSE:SVM), Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT), and Avaya Holdings Corp. (NYSE:AVYA) to gather more data points. Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey's monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That's why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Henrik Rhenman of Rhenman & Partners Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks to pick the best large-cap stocks to buy. 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 we're going to take a gander at the new hedge fund action surrounding Myovant Sciences Ltd. (NYSE:MYOV).
Do Hedge Funds Think MYOV Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 0% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards MYOV over the last 21 quarters. So, let's check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Cormorant Asset Management was the largest shareholder of Myovant Sciences Ltd. (NYSE:MYOV), with a stake worth $30 million reported as of the end of September. Trailing Cormorant Asset Management was Opaleye Management, which amassed a stake valued at $9.6 million. Partner Fund Management, Rock Springs Capital Management, and Rhenman & Partners Asset Management 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 Opaleye Management allocated the biggest weight to Myovant Sciences Ltd. (NYSE:MYOV), around 1.88% of its 13F portfolio. Cormorant Asset Management is also relatively very bullish on the stock, designating 1.15 percent of its 13F equity portfolio to MYOV.
Because Myovant Sciences Ltd. (NYSE:MYOV) has witnessed falling interest from the entirety of the hedge funds we track, it's easy to see that there was a specific group of hedgies that decided to sell off their full holdings heading into Q4. It's worth mentioning that Kamran Moghtaderi's Eversept Partners sold off the biggest investment of the "upper crust" of funds monitored by Insider Monkey, comprising an estimated $15.7 million in stock, and Israel Englander's Millennium Management was right behind this move, as the fund cut about $11.6 million worth. These transactions are important to note, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's now review hedge fund activity in other stocks similar to Myovant Sciences Ltd. (NYSE:MYOV). These stocks are Silvercorp Metals Inc. (NYSE:SVM), Rocket Pharmaceuticals, Inc. (NASDAQ:RCKT), Avaya Holdings Corp. (NYSE:AVYA), The Cheesecake Factory Incorporated (NASDAQ:CAKE), Kadant Inc. (NYSE:KAI), Trillium Therapeutics Inc. (NASDAQ:TRIL), and First Merchants Corporation (NASDAQ:FRME). All of these stocks' market caps match MYOV's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position SVM,8,63869,2 RCKT,19,239927,0 AVYA,34,359154,0 CAKE,25,151806,8 KAI,8,64381,3 TRIL,32,464628,7 FRME,15,65819,4 Average,20.1,201369,3.4 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 20.1 hedge funds with bullish positions and the average amount invested in these stocks was $201 million. That figure was $80 million in MYOV's case. Avaya Holdings Corp. (NYSE:AVYA) is the most popular stock in this table. On the other hand Silvercorp Metals Inc. (NYSE:SVM) is the least popular one with only 8 bullish hedge fund positions. Myovant Sciences Ltd. (NYSE:MYOV) is not the least popular stock in this group but hedge fund interest is still below average. Our overall hedge fund sentiment score for MYOV is 52.3. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. A small number of hedge funds were also right about betting on MYOV as the stock returned 71.6% since the end of the third quarter (through 12/14) and outperformed the market by an even larger margin.
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Disclosure: None. This article was originally published at Insider Monkey.