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Where Do Hedge Funds Stand On Vocera Communications Inc (VCRA)?

·5 min read

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 Vocera Communications Inc (NYSE:VCRA).

Vocera Communications Inc (NYSE:VCRA) shares haven't seen a lot of action during the second quarter. Overall, hedge fund sentiment was unchanged. The stock was in 20 hedge funds' portfolios at the end of the second quarter of 2021. Our calculations also showed that VCRA isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings). At the end of this article we will also compare VCRA to other stocks including Heartland Express, Inc. (NASDAQ:HTLD), AAR Corp. (NYSE:AIR), and Alexander's, Inc. (NYSE:ALX) to get a better sense of its popularity.

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That's why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Ryan Tolkin, CIO of Schonfeld Strategic Advisors

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, plant based food market is expected to explode 100-fold by 2050, so we are checking out this under-the-radar stock. We go through lists like the 10 best growth stocks to buy 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 we're going to view the recent hedge fund action surrounding Vocera Communications Inc (NYSE:VCRA).

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

At the end of the second quarter, a total of 20 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the first quarter of 2020. The graph below displays the number of hedge funds with bullish position in VCRA over the last 24 quarters. So, let's see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Millennium Management held the most valuable stake in Vocera Communications Inc (NYSE:VCRA), which was worth $29.8 million at the end of the second quarter. On the second spot was Renaissance Technologies which amassed $25 million worth of shares. No Street Capital, D E Shaw, and Two Sigma 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 No Street Capital allocated the biggest weight to Vocera Communications Inc (NYSE:VCRA), around 3.91% of its 13F portfolio. G2 Investment Partners Management is also relatively very bullish on the stock, designating 1.93 percent of its 13F equity portfolio to VCRA.

Seeing as Vocera Communications Inc (NYSE:VCRA) has witnessed bearish sentiment from hedge fund managers, it's safe to say that there is a sect of fund managers who sold off their full holdings in the second quarter. Intriguingly, Robert Henry Lynch's Aristeia Capital dropped the biggest stake of all the hedgies monitored by Insider Monkey, worth an estimated $2.3 million in stock, and Michael Gelband's ExodusPoint Capital was right behind this move, as the fund sold off about $0.9 million worth. These transactions are interesting, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let's check out hedge fund activity in other stocks similar to Vocera Communications Inc (NYSE:VCRA). These stocks are Heartland Express, Inc. (NASDAQ:HTLD), AAR Corp. (NYSE:AIR), Alexander's, Inc. (NYSE:ALX), Columbus McKinnon Corporation (NASDAQ:CMCO), Marten Transport, Ltd (NASDAQ:MRTN), The Children's Place Inc. (NASDAQ:PLCE), and Redwood Trust, Inc. (NYSE:RWT). This group of stocks' market valuations are similar to VCRA's market valuation.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position HTLD,14,47515,2 AIR,24,200639,4 ALX,13,112544,6 CMCO,15,39203,2 MRTN,15,41900,-3 PLCE,23,179168,5 RWT,12,54787,-6 Average,16.6,96537,1.4 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 16.6 hedge funds with bullish positions and the average amount invested in these stocks was $97 million. That figure was $164 million in VCRA's case. AAR Corp. (NYSE:AIR) is the most popular stock in this table. On the other hand Redwood Trust, Inc. (NYSE:RWT) is the least popular one with only 12 bullish hedge fund positions. Vocera Communications Inc (NYSE:VCRA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for VCRA is 68.3. 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 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 still beat the market by 1.6 percentage points. Hedge funds were also right about betting on VCRA as the stock returned 24.6% since the end of Q2 (through 10/22) 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.