At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
DBV Technologies SA – ADR (NASDAQ:DBVT) was in 14 hedge funds’ portfolios at the end of the third quarter of 2016. DBVT shareholders have witnessed an increase in activity from the world’s largest hedge funds of late. There were 10 hedge funds in our database with DBVT holdings at the end of the previous quarter. At the end of this article we will also compare DBVT to other stocks including Mitel Networks Corporation (NASDAQ:MITL), Universal Health Realty Income Trust (NYSE:UHT), and Green Plains Renewable Energy Inc. (NASDAQ:GPRE) 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.
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What does the smart money think about DBV Technologies SA – ADR (NASDAQ:DBVT)?
At Q3’s end, a total of 14 of the hedge funds tracked by Insider Monkey were long this stock, a 40% rise from one quarter earlier. The graph below displays the number of hedge funds with bullish positions in DBVT over the last 5 quarters, which shows a decline over that time, despite the Q3 gain. So, let’s examine 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, Baker Bros. Advisors, led by Julian Baker and Felix Baker, holds the biggest position in DBV Technologies SA – ADR (NASDAQ:DBVT). Baker Bros. Advisors has a $200.2 million position in the stock, comprising 1.8% of its 13F portfolio. Sitting at the No. 2 spot is James E. Flynn of Deerfield Management, with a $63.3 million position; 2.9% of its 13F portfolio is allocated to the company. Remaining professional money managers with similar optimism contain Anders Hove and Bong Koh’s VHCP Management, Joseph Edelman’s Perceptive Advisors, and Samuel Isaly’s OrbiMed Advisors. 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 industry-wide interest jumped, specific money managers were breaking ground themselves. OrbiMed Advisors established the most valuable position in DBV Technologies SA – ADR (NASDAQ:DBVT). OrbiMed Advisors had $12.6 million invested in the company at the end of the quarter. Ken Greenberg and David Kim’s Ghost Tree Capital also initiated a $9.1 million position during the quarter. The other funds with new positions in the stock are Jeffrey Jay and David Kroin’s Great Point Partners and Jerome Pfund and Michael Sjostrom’s Sectoral Asset Management.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as DBV Technologies SA – ADR (NASDAQ:DBVT) but similarly valued. We will take a look at Mitel Networks Corporation (NASDAQ:MITL), Universal Health Realty Income Trust (NYSE:UHT), Green Plains Renewable Energy Inc. (NASDAQ:GPRE), and Hanmi Financial Corp (NASDAQ:HAFC). This group of stocks’ market valuations match DBVT’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MITL | 19 | 124087 | 8 |
| UHT | 5 | 20523 | 0 |
| GPRE | 22 | 277446 | 4 |
| HAFC | 8 | 48653 | 1 |
As you can see these stocks had an average of 14 hedge funds with bullish positions and the average amount invested in these stocks was $118 million. That figure was $357 million in DBVT’s case. Green Plains Renewable Energy Inc. (NASDAQ:GPRE) is the most popular stock in this table. On the other hand Universal Health Realty Income Trust (NYSE:UHT) is the least popular one with only 5 bullish hedge fund positions. DBV Technologies SA – ADR (NASDAQ:DBVT) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard GPRE might be a better candidate to consider taking a long position in.
Disclosure: None
