Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of September. At Insider Monkey, we follow nearly 900 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is aTyr Pharma Inc. (NASDAQ:LIFE), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Is aTyr Pharma Inc. (NASDAQ:LIFE) a safe investment right now? Hedge funds were becoming more confident. The number of long hedge fund positions moved up by 2 lately. aTyr Pharma Inc. (NASDAQ:LIFE) was in 6 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 9. Our calculations also showed that LIFE isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings). There were 4 hedge funds in our database with LIFE positions at the end of the fourth quarter.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 206.8% since March 2017 and outperformed the S&P 500 ETFs by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
David Siegel of Two Sigma Advisors
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, an activist hedge fund owns nearly 40% of this $24 biotech stock and is trying to buy the rest for around $50. So, we recommended a long position to our monthly premium newsletter subscribers. We go through lists like the 10 best battery stocks to pick the next Tesla that will deliver a 10x return. 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 homepage. With all of this in mind let’s analyze the key hedge fund action regarding aTyr Pharma Inc. (NASDAQ:LIFE).
Do Hedge Funds Think LIFE Is A Good Stock To Buy Now?
At Q1’s end, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 50% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards LIFE over the last 23 quarters. With hedgies’ sentiment swirling, there exists a select group of noteworthy hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Alyeska Investment Group, managed by Anand Parekh, holds the number one position in aTyr Pharma Inc. (NASDAQ:LIFE). Alyeska Investment Group has a $4.4 million position in the stock, comprising 0.1% of its 13F portfolio. The second largest stake is held by Neil Shahrestani of Ikarian Capital, with a $1.3 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Remaining members of the smart money that are bullish encompass Renaissance Technologies, John Overdeck and David Siegel’s Two Sigma Advisors and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position Alyeska Investment Group allocated the biggest weight to aTyr Pharma Inc. (NASDAQ:LIFE), around 0.06% of its 13F portfolio. Ikarian Capital is also relatively very bullish on the stock, dishing out 0.05 percent of its 13F equity portfolio to LIFE.
Consequently, some big names were leading the bulls’ herd. Citadel Investment Group, managed by Ken Griffin, assembled the largest position in aTyr Pharma Inc. (NASDAQ:LIFE). Citadel Investment Group had $0.1 million invested in the company at the end of the quarter. Michael Gelband’s ExodusPoint Capital also made a $0 million investment in the stock during the quarter.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as aTyr Pharma Inc. (NASDAQ:LIFE) but similarly valued. These stocks are Achieve Life Sciences, Inc. (NASDAQ:ACHV), Jerash Holdings (US), Inc. (NASDAQ:JRSH), Ark Restaurants Corp. (NASDAQ:ARKR), Chembio Diagnostics Inc (NASDAQ:CEMI), Vertex Energy Inc (NASDAQ:VTNR), ImmuCell Corporation (NASDAQ:ICCC), and Hudson Technologies, Inc. (NASDAQ:HDSN). This group of stocks’ market valuations are closest to LIFE’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ACHV | 3 | 3690 | 0 |
| JRSH | 2 | 1527 | 0 |
| ARKR | 1 | 1213 | 0 |
| CEMI | 7 | 3452 | 1 |
| VTNR | 5 | 4142 | 0 |
| ICCC | 2 | 1921 | 0 |
| HDSN | 3 | 664 | 0 |
| Average | 3.3 | 2373 | 0.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 3.3 hedge funds with bullish positions and the average amount invested in these stocks was $2 million. That figure was $7 million in LIFE’s case. Chembio Diagnostics Inc (NASDAQ:CEMI) is the most popular stock in this table. On the other hand Ark Restaurants Corp. (NASDAQ:ARKR) is the least popular one with only 1 bullish hedge fund positions. aTyr Pharma Inc. (NASDAQ:LIFE) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for LIFE is 68.7. 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. 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 19.3% in 2021 through June 25th and still beat the market by 4.8 percentage points. Hedge funds were also right about betting on LIFE, though not to the same extent, as the stock returned 8.1% since Q1 (through June 25th) and outperformed the market as well.
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Disclosure: None. This article was originally published at Insider Monkey.
