A day after shares fell by 16%, Aduro BioTech Inc (NASDAQ:ADRO) has made up most of the losses, gaining 16.49% in trading today after holding a conference call to comment on the previous day’s seemingly dire news. That news revealed that one of the patients enrolled in a trial of the company’s listeria-based pancreatic cancer drug CRS-207 had contracted listeriosis, a potentially fatal disease given such patients’ already weakened immune systems. However, the company revealed that the phase 3 trial is ongoing and on track, which has softened fears that the treatment would need to head back to the drawing board. Nonetheless, investors tracked by Insider Monkey were growing less confident about the company heading into quarter. We’ll look at how they’ve traded the stock recently below.
Is Aduro BioTech Inc (NASDAQ:ADRO) a buy, sell, or hold? Hedge funds are becoming less confident. The number of long hedge fund positions shrunk by 2 in the third quarter. At the end of this article we will also compare Aduro BioTech Inc (NASDAQ:ADRO) to other stocks including Atlantic Tele-Network, Inc. (NASDAQ:ATNI), Independent Bank Corp (NASDAQ:INDB), and WesBanco, Inc. (NASDAQ:WSBC) to get a better sense of its popularity.
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Today there are a lot of tools shareholders have at their disposal to appraise publicly traded companies. A duo of the less known tools are hedge fund and insider trading sentiment. Our experts have shown that, historically, those who follow the best picks of the elite hedge fund managers can outclass the S&P 500 by a superb amount (see the details here).
With all of this in mind, we’re going to take a gander at the new action surrounding Aduro BioTech Inc (NASDAQ:ADRO).
Hedge fund activity in Aduro BioTech Inc (NASDAQ:ADRO)
At Q3’s end, a total of 9 of the hedge funds tracked by Insider Monkey held long positions in this stock, an 18% slide from one quarter earlier. With hedge funds’ capital changing hands, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, OrbiMed Advisors, managed by Samuel Isaly, holds the largest position in Aduro BioTech Inc (NASDAQ:ADRO). OrbiMed Advisors has a $20.6 million position in the stock, comprising 0.2% of its 13F portfolio. On OrbiMed Advisors’ heels is Point72 Asset Management, led by Steve Cohen, holding a $16.4 million position; the family office has 0.1% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish include Charles Clough’s Clough Capital Partners, Kris Jenner, Gordon Bussard, and Graham McPhail’s Rock Springs Capital Management, and Lee Munder’s Lee Munder Capital Group.
Because Aduro BioTech Inc (NASDAQ:ADRO) has experienced declining sentiment from the aggregate hedge fund industry, it’s safe to say that there were a few money managers that slashed their positions entirely heading into Q4. Intriguingly, Ken Griffin’s Citadel Investment Group sold off the biggest position of all the hedgies monitored by Insider Monkey, totaling about $1 million in call options underlying shares of Aduro. Griffin also closed a smaller long position. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest was cut by 2 funds heading into Q4.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Aduro BioTech Inc (NASDAQ:ADRO) but similarly valued. We will take a look at Atlantic Tele-Network, Inc. (NASDAQ:ATNI), Independent Bank Corp (NASDAQ:INDB), WesBanco, Inc. (NASDAQ:WSBC), and MedAssets, Inc. (NASDAQ:MDAS). All of these stocks’ market caps are closest to Aduro BioTech Inc (NASDAQ:ADRO)’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ATNI | 9 | 41405 | 0 |
| INDB | 8 | 26253 | 3 |
| WSBC | 7 | 16647 | -2 |
| MDAS | 17 | 315102 | 1 |
As you can see these stocks had an average of 10.25 hedge funds with bullish positions and the average amount invested in these stocks was $100 million. That figure was $63 million in Aduro’s case. MedAssets, Inc. (NASDAQ:MDAS) is the most popular stock in this table. On the other hand WesBanco, Inc. (NASDAQ:WSBC) is the least popular one with only 7 bullish hedge fund positions. Aduro BioTech Inc (NASDAQ:ADRO) is not the least popular stock in this group but hedge fund interest is still below average for its market cap. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. In this regard MedAssets might be a better candidate to consider a long position in.