We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC) based on that data.
Is Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC) a sound investment now? Money managers are in a bullish mood. The number of long hedge fund bets advanced by 1 recently. Our calculations also showed that TRHC 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If you'd ask most shareholders, hedge funds are viewed as slow, outdated financial vehicles of the past. While there are more than 8000 funds with their doors open at present, We hone in on the moguls of this group, about 850 funds. Most estimates calculate that this group of people command bulk of the smart money's total asset base, and by following their highest performing picks, Insider Monkey has found numerous investment strategies that have historically surpassed Mr. Market. Insider Monkey's flagship short hedge fund strategy beat the S&P 500 short ETFs by around 20 percentage points per 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 .
[caption id="attachment_256989" align="aligncenter" width="393"] Dmitry Balyasny of Balyasny Asset Management[/caption]
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, 2020’s unprecedented market conditions provide us with the highest number of trading opportunities in a decade. So we are checking out stocks recommended/scorned by legendary Bill Miller. 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 let's take a gander at the fresh hedge fund action surrounding Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC).
Hedge fund activity in Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC)
At Q1's end, a total of 7 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 17% from the fourth quarter of 2019. By comparison, 7 hedge funds held shares or bullish call options in TRHC a year ago. So, let's review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC) was held by Sectoral Asset Management, which reported holding $9.2 million worth of stock at the end of September. It was followed by Millennium Management with a $4.3 million position. Other investors bullish on the company included Citadel Investment Group, Royce & Associates, and Citadel Investment Group. In terms of the portfolio weights assigned to each position Sectoral Asset Management allocated the biggest weight to Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC), around 1.77% of its 13F portfolio. Royce & Associates is also relatively very bullish on the stock, dishing out 0.03 percent of its 13F equity portfolio to TRHC.
As one would reasonably expect, key hedge funds have jumped into Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC) headfirst. Citadel Investment Group, managed by Ken Griffin, established the most valuable position in Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC). Citadel Investment Group had $1.4 million invested in the company at the end of the quarter. Dmitry Balyasny's Balyasny Asset Management also made a $0.5 million investment in the stock during the quarter. The other funds with brand new TRHC positions are Michael Gelband's ExodusPoint Capital and D. E. Shaw's D E Shaw.
Let's go over hedge fund activity in other stocks similar to Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC). We will take a look at AdaptHealth Corp. (NASDAQ:AHCO), Azul S.A. (NYSE:AZUL), Delek US Holdings, Inc. (NYSE:DK), and Xenia Hotels & Resorts Inc (NYSE:XHR). This group of stocks' market caps are similar to TRHC's market cap.
[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position AHCO,10,349980,0 AZUL,8,49217,-3 DK,16,202953,-3 XHR,8,12427,-3 Average,10.5,153644,-2.25 [/table]
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $154 million. That figure was $18 million in TRHC's case. Delek US Holdings, Inc. (NYSE:DK) is the most popular stock in this table. On the other hand Azul S.A. (NYSE:AZUL) is the least popular one with only 8 bullish hedge fund positions. Compared to these stocks Tabula Rasa HealthCare, Inc. (NASDAQ:TRHC) is even less popular than AZUL. Hedge funds dodged a bullet by taking a bearish stance towards TRHC. Our calculations showed that the top 10 most popular hedge fund stocks returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 13.9% in 2020 through June 10th but managed to beat the market by 14.2 percentage points. Unfortunately TRHC wasn't nearly as popular as these 10 stocks (hedge fund sentiment was very bearish); TRHC investors were disappointed as the stock returned 6.9% during the second quarter (through June 10th) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as most of these stocks already outperformed the market so far in 2020.
Disclosure: None. This article was originally published at Insider Monkey.