Is Nurix Therapeutics, Inc. (NRIX) A Good Stock To Buy?

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In this article we are going to use hedge fund sentiment as a tool and determine whether Nurix Therapeutics, Inc. (NASDAQ:NRIX) is a good investment right now. We like to analyze hedge fund sentiment before conducting days of in-depth research. We do so because hedge funds and other elite investors have numerous Ivy League graduates, expert network advisers, and supply chain tipsters working or consulting for them. There is not a shortage of news stories covering failed hedge fund investments and it is a fact that hedge funds’ picks don’t beat the market 100% of the time, but their consensus picks have historically done very well and have outperformed the market after adjusting for risk.

Is NRIX a good stock to buy? The smart money was getting more optimistic. The number of long hedge fund positions inched up by 6 lately. Nurix Therapeutics, Inc. (NASDAQ:NRIX) was in 17 hedge funds’ portfolios at the end of March. The all time high for this statistic is 12. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that NRIX isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).

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Felix Baker of Baker Bros.

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

At the end of March, a total of 17 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 55% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards NRIX over the last 23 quarters. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

More specifically, Redmile Group was the largest shareholder of Nurix Therapeutics, Inc. (NASDAQ:NRIX), with a stake worth $103 million reported as of the end of March. Trailing Redmile Group was Baker Bros. Advisors, which amassed a stake valued at $76.3 million. EcoR1 Capital, Harvard Management Co, and Rock Springs Capital Management 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 EcoR1 Capital allocated the biggest weight to Nurix Therapeutics, Inc. (NASDAQ:NRIX), around 2.78% of its 13F portfolio. DAFNA Capital Management is also relatively very bullish on the stock, dishing out 2.26 percent of its 13F equity portfolio to NRIX.

As one would reasonably expect, key hedge funds were breaking ground themselves. DAFNA Capital Management, managed by Nathan Fischel, established the largest position in Nurix Therapeutics, Inc. (NASDAQ:NRIX). DAFNA Capital Management had $9.5 million invested in the company at the end of the quarter. Doron Breen and Mori Arkin’s Sphera Global Healthcare Fund also made a $6.7 million investment in the stock during the quarter. The other funds with new positions in the stock are Matthew L Pinz’s Pinz Capital, Dmitry Balyasny’s Balyasny Asset Management, and D. E. Shaw’s D E Shaw.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Nurix Therapeutics, Inc. (NASDAQ:NRIX) but similarly valued. We will take a look at Raven Industries, Inc. (NASDAQ:RAVN), e.l.f. Beauty, Inc. (NYSE:ELF), Calavo Growers, Inc. (NASDAQ:CVGW), H&E Equipment Services, Inc. (NASDAQ:HEES), Ouster, Inc. (NYSE:OUST), 17 Education & Technology Group Inc. (NASDAQ:YQ), and Ebang International Holdings Inc. (NASDAQ:EBON). This group of stocks’ market valuations resemble NRIX’s market valuation.

Ticker No of HFs with positions Total Value of HF Positions (x1000) Change in HF Position
RAVN 16 98313 2
ELF 21 138769 -8
CVGW 9 64050 -1
HEES 14 67670 -3
OUST 19 129618 19
YQ 7 7440 -6
EBON 8 9048 5
Average 13.4 73558 1.1

View table here if you experience formatting issues.

As you can see these stocks had an average of 13.4 hedge funds with bullish positions and the average amount invested in these stocks was $74 million. That figure was $302 million in NRIX’s case. e.l.f. Beauty, Inc. (NYSE:ELF) is the most popular stock in this table. On the other hand 17 Education & Technology Group Inc. (NASDAQ:YQ) is the least popular one with only 7 bullish hedge fund positions. Nurix Therapeutics, Inc. (NASDAQ:NRIX) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NRIX is 75.7. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 28.5% in 2021 through July 23rd and beat the market again by 10.1 percentage points. Unfortunately NRIX wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NRIX were disappointed as the stock returned -1.2% since the end of March (through 7/23) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.

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