EXACT Sciences Corporation (NASDAQ:EXAS) has seen a small outflow of some hedge funds from its stock, but others are seizing the opportunity to boost their stakes in the maker of cancer screening products. One such fund is D E Show managed by David E. Show.
A recent filing with the U.S. Securities and Exchange Commission shows that D E Show now owns more than 4.9 million shares in EXACT Sciences, which equates to about 5% ownership of the company’s common stock.
The fund boosted its holding in EXACT Sciences from 3.28 million shares in held at the end of 1Q2016.
D E Show increased stake in EXACT Sciences Corporation at a time when the stock has rallied and some analysts on Wall Street have raised their price target on it. EXACT Sciences also surprised analysts in its latest quarter report with earnings and revenue figures that exceeded expectations.
Stock rally
If you look at the charts, you see that shares of EXACT Sciences have advanced almost 185% over the last six months and more than 92% YTD.
Favorable recommendation
Analysts are also beginning to notice the potential in EXACT Sciences Corporation and they are not hesitating to review their estimates on the stock. Canaccord Genuity recently moved to increase its price target on the stock. The upgrade of EXAS price target by Canaccord came after a statement from the U.S. Preventive Services Task Force highlighted the potential of the company’s cancer testing technology.
Exceeding expectations
In 2Q2016, EXACT Sciences Corporation posted EPS loss of $0.46 on revenue of $21.2 million. But those on Wall Street were looking for EPS loss of $0.55 on revenue of $18.54 million.
The company is in the process of developing products to help with screening other types of cancers beyond colorectal cancer that it currently covers. EXACT Sciences is in the process of raising funds through the sale of at least 8.5 million shares to help it fund commercialization of its existing product and research on new products.
Decrease hedge funds
The number of hedge funds holding long positions in the company declined to 16 at the end of 1Q2016 compared to 20 at the end of 4Q2015.
Buyout rumors
Shares of the company rallied in mid-July amid speculations that the company could be a buyout target by a company called ILMN.