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. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. In this article we are going to take a look at smart money sentiment towards Innoviva, Inc. (NASDAQ:INVA).
Hedge fund interest in Innoviva, Inc. (NASDAQ:INVA) shares was flat at the end of last quarter. This is usually a negative indicator. 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 Atrion Corporation (NASDAQ:ATRI), Tri Pointe Group Inc (NYSE:TPH), and Masonite International Corp (NYSE:DOOR) to gather more data points. Our calculations also showed that INVA 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.
If you'd ask most stock holders, hedge funds are viewed as slow, old financial tools of yesteryear. While there are over 8000 funds with their doors open at present, We hone in on the leaders of this group, about 850 funds. These money managers command most of the hedge fund industry's total asset base, and by observing their inimitable investments, Insider Monkey has revealed numerous investment strategies that have historically surpassed the market. Insider Monkey's flagship short hedge fund strategy outperformed the S&P 500 short ETFs by around 20 percentage points a year since its inception in March 2017. Our portfolio of short stocks lost 36% since February 2017 (through May 18th) even though the market was up 30% during the same period. We just shared a list of 8 short targets in our latest quarterly update .
Alex Denner of Sarissa Capital Management[/caption]
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. 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 we're going to view the key hedge fund action surrounding Innoviva, Inc. (NASDAQ:INVA).
How have hedgies been trading Innoviva, Inc. (NASDAQ:INVA)?
Heading into the second quarter of 2020, a total of 19 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards INVA over the last 18 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.
Among these funds, Renaissance Technologies held the most valuable stake in Innoviva, Inc. (NASDAQ:INVA), which was worth $96.5 million at the end of the third quarter. On the second spot was Sarissa Capital Management which amassed $73.4 million worth of shares. Antara Capital, Arrowstreet Capital, and D E Shaw 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 Sarissa Capital Management allocated the biggest weight to Innoviva, Inc. (NASDAQ:INVA), around 9.36% of its 13F portfolio. 13D Management is also relatively very bullish on the stock, designating 2.02 percent of its 13F equity portfolio to INVA.
Seeing as Innoviva, Inc. (NASDAQ:INVA) has faced bearish sentiment from the aggregate hedge fund industry, logic holds that there exists a select few hedge funds that elected to cut their positions entirely in the first quarter. Intriguingly, Andre F. Perold's HighVista Strategies sold off the largest stake of the "upper crust" of funds tracked by Insider Monkey, totaling about $2.7 million in stock. Ryan Tolkin (CIO)'s fund, Schonfeld Strategic Advisors, also said goodbye to its stock, about $0.3 million worth. These moves are important to note, as total hedge fund interest stayed the same (this is a bearish signal in our experience).
Let's go over hedge fund activity in other stocks - not necessarily in the same industry as Innoviva, Inc. (NASDAQ:INVA) but similarly valued. These stocks are Atrion Corporation (NASDAQ:ATRI), Tri Pointe Group Inc (NYSE:TPH), Masonite International Corp (NYSE:DOOR), and Grupo Simec S.A.B. de C.V. (NYSE:SIM). This group of stocks' market valuations resemble INVA's market valuation.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position ATRI,12,68214,-3 TPH,27,142074,-5 DOOR,26,271479,5 SIM,1,1807,0 Average,16.5,120894,-0.75 [/table]
As you can see these stocks had an average of 16.5 hedge funds with bullish positions and the average amount invested in these stocks was $121 million. That figure was $252 million in INVA's case. Tri Pointe Group Inc (NYSE:TPH) is the most popular stock in this table. On the other hand Grupo Simec S.A.B. de C.V. (NYSE:SIM) is the least popular one with only 1 bullish hedge fund positions. Innoviva, Inc. (NASDAQ:INVA) is not the most popular stock in this group but hedge fund interest is still above average. 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 gained 13.4% in 2020 through June 22nd but still beat the market by 15.9 percentage points. Hedge funds were also right about betting on INVA as the stock returned 29.8% in Q2 (through June 22nd) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
