Billionaire hedge fund managers such as Steve Cohen and Stan Druckenmiller can generate millions or even billions of dollars every year by pinning down high-potential small-cap stocks and pouring cash into these candidates. Small-cap stocks are overlooked by most investors, brokerage houses, and financial services hubs, while the unlimited research abilities of the big players within the hedge fund industry can easily identify the undervalued and high-potential stocks that reside the ignored corners of equity markets. There are numerous small-cap stocks that have turned out to be great winners, which is one of the main reasons the Insider Monkey team pays close attention to the hedge fund activity in relation to these stocks.
Is Ascendis Pharma A/S (NASDAQ:ASND) a buy, sell, or hold? The best stock pickers are altogether getting more optimistic. The number of long hedge fund bets that are revealed through the 13F filings experienced an increase of 1 recently. At the end of this article we will also compare ASND to other stocks including Overstock.com, Inc. (NASDAQ:OSTK), Myers Industries, Inc. (NYSE:MYE), and Axcelis Technologies Inc (NASDAQ:ACLS) to get a better sense of its popularity.
At Insider Monkey, we’ve developed an investment strategy that has delivered market-beating returns over the past 12 months. Our strategy identifies the 100 best-performing funds of the previous quarter from among the collection of 700+ successful funds that we track in our database, which we accomplish using our returns methodology. We then study the portfolios of those 100 funds using the latest 13F data to uncover the 30 most popular mid-cap stocks (market caps of between $1 billion and $10 billion) among them to hold until the next filing period. This strategy delivered 18% gains over the past 12 months, more than doubling the 8% returns enjoyed by the S&P 500 ETFs.
Monkey Business Images/Shutterstock.com
Hedge fund activity in Ascendis Pharma A/S (NASDAQ:ASND)
At the end of the third quarter, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 9% rise from the second quarter of 2016. By comparison, 11 hedge funds held shares or bullish call options in ASND heading into this year, so sentiment is also up slightly in 2016. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, RA Capital Management, led by Peter Kolchinsky, holds the biggest position in Ascendis Pharma A/S (NASDAQ:ASND). RA Capital Management has a $74 million position in the stock, comprising 7.6% of its 13F portfolio. The second largest stake is held by OrbiMed Advisors, led by Samuel Isaly, holding a $44 million position. Other hedge funds and institutional investors that hold long positions encompass Julian Baker and Felix Baker’s Baker Bros. Advisors, Kris Jenner, Gordon Bussard, and Graham McPhail’s Rock Springs Capital Management, and Oleg Nodelman’s EcoR1 Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As one would reasonably expect, key hedge funds have been driving this bullishness. EcoR1 Capital initiated the most valuable position in Ascendis Pharma A/S (NASDAQ:ASND). EcoR1 Capital had $4.4 million invested in the company at the end of the quarter. Ori Hershkovitz’s Nexthera Capital also initiated a $2.9 million position during the quarter. The other funds with new positions in the stock are Millennium Management, one of the 10 largest hedge funds in the world, and Behzad Aghazadeh’s venBio Select Advisor.
Let’s now review hedge fund activity in other stocks similar to Ascendis Pharma A/S (NASDAQ:ASND). We will take a look at Overstock.com, Inc. (NASDAQ:OSTK), Myers Industries, Inc. (NYSE:MYE), Axcelis Technologies Inc (NASDAQ:ACLS), and Fly Leasing Ltd(ADR) (NYSE:FLY). This group of stocks’ market valuations match ASND’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OSTK | 12 | 83600 | 0 |
| MYE | 9 | 68835 | 0 |
| ACLS | 10 | 57942 | -2 |
| FLY | 8 | 41338 | -1 |
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $63 million. That figure was $155 million in ASND’s case. Overstock.com, Inc. (NASDAQ:OSTK) is the most popular stock in this table. On the other hand Fly Leasing Ltd(ADR) (NYSE:FLY) is the least popular one with only 8 bullish hedge fund positions. Ascendis Pharma A/S (NASDAQ:ASND) is tied as being the most popular stock in this group. This is a positive signal, as we’d rather spend our time researching stocks that hedge funds are overweight. In this regard ASND might be a good candidate to consider taking a long position in.
Disclosure: None
