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 have processed the filings of the more than 817 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their September 30 holdings, data that is available nowhere else. Should you consider Vericel Corp (NASDAQ:VCEL) for your portfolio? We'll look to this invaluable collective wisdom for the answer.
Is VCEL a good stock to buy now? The best stock pickers were getting more bullish. The number of long hedge fund positions improved by 3 in recent months. Vericel Corp (NASDAQ:VCEL) was in 20 hedge funds' portfolios at the end of September. The all time high for this statistic is 25. Our calculations also showed that VCEL 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). There were 17 hedge funds in our database with VCEL positions at the end of the second quarter. Video: Watch our video about the top 5 most popular hedge fund stocks.
To the average investor there are a multitude of methods shareholders employ to assess publicly traded companies. A duo of the less utilized methods are hedge fund and insider trading signals. Our experts have shown that, historically, those who follow the best picks of the top fund managers can beat the S&P 500 by a significant margin (see the details here).
James E. Flynn of Deerfield 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 let's take a peek at the fresh hedge fund action surrounding Vericel Corp (NASDAQ:VCEL).
Do Hedge Funds Think VCEL Is A Good Stock To Buy Now?
At the end of the third quarter, a total of 20 of the hedge funds tracked by Insider Monkey were long this stock, a change of 18% from the second quarter of 2020. Below, you can check out the change in hedge fund sentiment towards VCEL over the last 21 quarters. With hedgies' sentiment swirling, there exists an "upper tier" of notable hedge fund managers who were upping their holdings significantly (or already accumulated large positions).
More specifically, Deerfield Management was the largest shareholder of Vericel Corp (NASDAQ:VCEL), with a stake worth $27.6 million reported as of the end of September. Trailing Deerfield Management was Great Point Partners, which amassed a stake valued at $27.4 million. Pura Vida Investments, Iron Triangle Partners, and Intrinsic Edge Capital 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 Soleus Capital allocated the biggest weight to Vericel Corp (NASDAQ:VCEL), around 3.47% of its 13F portfolio. Great Point Partners is also relatively very bullish on the stock, designating 2.47 percent of its 13F equity portfolio to VCEL.
Consequently, specific money managers were leading the bulls' herd. Pura Vida Investments, managed by Efrem Kamen, established the most outsized position in Vericel Corp (NASDAQ:VCEL). Pura Vida Investments had $16.7 million invested in the company at the end of the quarter. Kevin Molloy's Iron Triangle Partners also initiated a $10.7 million position during the quarter. The following funds were also among the new VCEL investors: Mark Coe's Intrinsic Edge Capital, Ken Fisher's Fisher Asset Management, and Michael Gelband's ExodusPoint Capital.
Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Vericel Corp (NASDAQ:VCEL) but similarly valued. These stocks are Morphic Holding, Inc. (NASDAQ:MORF), Cango Inc. (NYSE:CANG), Diversified Healthcare Trust (NASDAQ:DHC), General American Investors Company, Inc. (NYSE:GAM), Sprott Inc. (NYSE:SII), Alector, Inc. (NASDAQ:ALEC), and QuinStreet Inc (NASDAQ:QNST). This group of stocks' market caps are closest to VCEL's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position MORF,8,112234,1 CANG,2,254,1 DHC,12,25000,-2 GAM,4,28358,1 SII,14,103508,6 ALEC,24,124557,-5 QNST,16,173724,-4 Average,11.4,81091,-0.3 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.4 hedge funds with bullish positions and the average amount invested in these stocks was $81 million. That figure was $124 million in VCEL's case. Alector, Inc. (NASDAQ:ALEC) is the most popular stock in this table. On the other hand Cango Inc. (NYSE:CANG) is the least popular one with only 2 bullish hedge fund positions. Vericel Corp (NASDAQ:VCEL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VCEL is 72.9. 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. Hedge funds were also right about betting on VCEL as the stock returned 41.4% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.