Is Vaccinex, Inc. (VCNX) Burning These Hedging Funds ?

Reymerlyn Martin

Mon, Nov 25, 2019, 5:18 PM

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million equity holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on September 30th. We at Insider Monkey have made an extensive database of nearly 750 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Vaccinex, Inc. (NASDAQ:VCNX) based on those filings.

Is Vaccinex, Inc. (NASDAQ:VCNX) a healthy stock for your portfolio? Prominent investors are taking a bullish view. The number of bullish hedge fund positions inched up by 1 recently. Our calculations also showed that VCNX isn't among the 30 most popular stocks among hedge funds (see the video below). VCNX was in 2 hedge funds' portfolios at the end of the third quarter of 2019. There were 1 hedge funds in our database with VCNX positions at the end of the previous quarter.

Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.

Today there are a large number of formulas stock traders use to evaluate stocks. Some of the most useful formulas are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the top picks of the elite investment managers can trounce the broader indices by a solid amount (see the details here).

[caption id="attachment_27676" align="aligncenter" width="355"]

Israel Englander of Millennium Management[/caption]

Let's view the recent hedge fund action surrounding Vaccinex, Inc. (NASDAQ:VCNX).

Hedge fund activity in Vaccinex, Inc. (NASDAQ:VCNX)

At Q3's end, a total of 2 of the hedge funds tracked by Insider Monkey were long this stock, a change of 100% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards VCNX over the last 17 quarters. With hedgies' positions undergoing their usual ebb and flow, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, MSDC Management, managed by Marc Lisker, Glenn Fuhrman and John Phelan, holds the number one position in Vaccinex, Inc. (NASDAQ:VCNX). MSDC Management has a $8.8 million position in the stock, comprising 1.2% of its 13F portfolio. The second largest stake is held by Israel Englander of Millennium Management, with a $0.5 million position; the fund has less than 0.1%% of its 13F portfolio invested in the stock. In terms of the portfolio weights assigned to each position MSDC Management allocated the biggest weight to Vaccinex, Inc. (NASDAQ:VCNX), around 1.18% of its portfolio. Millennium Management is also relatively very bullish on the stock, earmarking 0.0007 percent of its 13F equity portfolio to VCNX.

As industrywide interest jumped, specific money managers have jumped into Vaccinex, Inc. (NASDAQ:VCNX) headfirst. MSDC Management, managed by Marc Lisker, Glenn Fuhrman and John Phelan, initiated the most valuable position in Vaccinex, Inc. (NASDAQ:VCNX). MSDC Management had $8.8 million invested in the company at the end of the quarter.

Let's now take a look at hedge fund activity in other stocks - not necessarily in the same industry as Vaccinex, Inc. (NASDAQ:VCNX) but similarly valued. These stocks are Riverview Financial Corporation (NASDAQ:RIVE), Menlo Therapeutics Inc. (NASDAQ:MNLO), Dean Foods Company (NYSE:DF), and UTStarcom Holdings Corp (NASDAQ:UTSI). This group of stocks' market values are closest to VCNX's market value.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position RIVE,5,9321,2 MNLO,9,40281,-1 DF,9,1672,-1 UTSI,1,3451,-1 Average,6,13681,-0.25 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 6 hedge funds with bullish positions and the average amount invested in these stocks was $14 million. That figure was $9 million in VCNX's case. Menlo Therapeutics Inc. (NASDAQ:MNLO) is the most popular stock in this table. On the other hand UTStarcom Holdings Corp (NASDAQ:UTSI) is the least popular one with only 1 bullish hedge fund positions. Vaccinex, Inc. (NASDAQ:VCNX) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we'd rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 34.7% in 2019 through November 22nd and outperformed the S&P 500 ETF (SPY) by 8.5 percentage points. Unfortunately VCNX wasn't nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); VCNX investors were disappointed as the stock returned -35.7% during the fourth quarter (through 11/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market in Q4.

Disclosure: None. This article was originally published at Insider Monkey.

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