Is Moderna (MRNA) Stock A Buy or Sell?

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The Insider Monkey team has completed processing the quarterly 13F filings for the December quarter submitted by the hedge funds and other money managers included in our extensive database. Most hedge fund investors experienced strong gains on the back of a strong market performance, which certainly propelled them to adjust their equity holdings so as to maintain the desired risk profile. As a result, the relevancy of these public filings and their content is indisputable, as they may reveal numerous high-potential stocks. The following article will discuss the smart money sentiment towards Moderna, Inc. (NASDAQ:MRNA).

Is MRNA stock a buy or sell? Hedge funds were in an optimistic mood. The number of bullish hedge fund positions went up by 9 recently. Moderna, Inc. (NASDAQ:MRNA) was in 41 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic was previously 37. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that MRNA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 124 percentage points since March 2017 (see the details here).

David Siegel of Two Sigma Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, the House passed a landmark bill decriminalizing marijuana. So, we are checking out this under the radar cannabis stock right now. We go through lists like the 10 best battery stocks to buy to identify the next stock with 10x upside potential. 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 look at the key hedge fund action encompassing Moderna, Inc. (NASDAQ:MRNA).

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

At fourth quarter’s end, a total of 41 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 28% from the previous quarter. By comparison, 12 hedge funds held shares or bullish call options in MRNA a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, Theleme Partners held the most valuable stake in Moderna, Inc. (NASDAQ:MRNA), which was worth $558.3 million at the end of the fourth quarter. On the second spot was D E Shaw which amassed $324.9 million worth of shares. Renaissance Technologies, Citadel Investment Group, 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 Theleme Partners allocated the biggest weight to Moderna, Inc. (NASDAQ:MRNA), around 18.33% of its 13F portfolio. Sabby Capital is also relatively very bullish on the stock, earmarking 2.32 percent of its 13F equity portfolio to MRNA.

As industrywide interest jumped, key hedge funds have been driving this bullishness. Renaissance Technologies, assembled the most valuable position in Moderna, Inc. (NASDAQ:MRNA). Renaissance Technologies had $183.1 million invested in the company at the end of the quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP also initiated a $26.4 million position during the quarter. The other funds with new positions in the stock are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Doug Silverman and Alexander Klabin’s Senator Investment Group, and Ryan Caldwell’s Chiron Investment Management.

Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Moderna, Inc. (NASDAQ:MRNA) but similarly valued. These stocks are American Electric Power Company, Inc. (NASDAQ:AEP), Veeva Systems Inc (NYSE:VEEV), Exelon Corporation (NASDAQ:EXC), Dow Inc. (NYSE:DOW), Carvana Co. (NYSE:CVNA), Baxter International Inc. (NYSE:BAX), and CNOOC Limited (NYSE:CEO). This group of stocks’ market caps resemble MRNA’s market cap.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
AEP 32 331817 2
VEEV 36 884354 -2
EXC 30 729348 1
DOW 47 711306 5
CVNA 63 7071672 10
BAX 42 2801959 -9
CEO 13 197301 -1
Average 37.6 1818251 0.9

View table here if you experience formatting issues.

As you can see these stocks had an average of 37.6 hedge funds with bullish positions and the average amount invested in these stocks was $1818 million. That figure was $1479 million in MRNA’s case. Carvana Co. (NYSE:CVNA) is the most popular stock in this table. On the other hand CNOOC Limited (NYSE:CEO) is the least popular one with only 13 bullish hedge fund positions. Moderna, Inc. (NASDAQ:MRNA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for MRNA is 68. 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 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 5.3% in 2021 through March 19th and still beat the market by 0.8 percentage points. Hedge funds were also right about betting on MRNA as the stock returned 37.6% since the end of Q4 (through 3/19) 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.