Did Hedge Funds Catch A Break With Aclaris Therapeutics, Inc. (ACRS)?

The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 867 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of September 30th, when the S&P 500 Index was trading around the 4300 level. Since then investors decided to bet on the economic recovery and a stock market rebound even though we experienced a temporary correction in January. In this article you are going to find out whether hedge funds thought Aclaris Therapeutics, Inc. (NASDAQ:ACRS) was a good investment heading into the fourth quarter and how the stock traded in comparison to the top hedge fund picks.

Is Aclaris Therapeutics, Inc. (NASDAQ:ACRS) ready to rally soon? Money managers were taking a pessimistic view. The number of bullish hedge fund positions dropped by 1 recently. Aclaris Therapeutics, Inc. (NASDAQ:ACRS) was in 36 hedge funds’ portfolios at the end of the third quarter of 2021. The all time high for this statistic is 37. Our calculations also showed that ACRS isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV 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. With all of this in mind let’s take a look at the fresh hedge fund action encompassing Aclaris Therapeutics, Inc. (NASDAQ:ACRS).

Kris Jenner of Rock Springs Capital Management

Do Hedge Funds Think ACRS Is A Good Stock To Buy Now?

At the end of the third quarter, a total of 36 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -3% from the second quarter of 2021. On the other hand, there were a total of 16 hedge funds with a bullish position in ACRS a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were upping their holdings considerably (or already accumulated large positions).

More specifically, Rock Springs Capital Management was the largest shareholder of Aclaris Therapeutics, Inc. (NASDAQ:ACRS), with a stake worth $68.5 million reported as of the end of September. Trailing Rock Springs Capital Management was Commodore Capital, which amassed a stake valued at $39.4 million. Renaissance Technologies, Holocene Advisors, and Foresite Capital were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Foresite Capital allocated the biggest weight to Aclaris Therapeutics, Inc. (NASDAQ:ACRS), around 48.8% of its 13F portfolio. Commodore Capital is also relatively very bullish on the stock, setting aside 10.39 percent of its 13F equity portfolio to ACRS.

Because Aclaris Therapeutics, Inc. (NASDAQ:ACRS) has experienced bearish sentiment from the entirety of the hedge funds we track, logic holds that there is a sect of fund managers who were dropping their positions entirely in the third quarter. It’s worth mentioning that Arsani William’s Logos Capital sold off the biggest position of the 750 funds tracked by Insider Monkey, worth an estimated $11.9 million in stock. Matthew L Pinz’s fund, Pinz Capital, also sold off its stock, about $2 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest fell by 1 funds in the third quarter.

Let’s also examine hedge fund activity in other stocks similar to Aclaris Therapeutics, Inc. (NASDAQ:ACRS). These stocks are Anterix Inc. (NASDAQ:ATEX), Uxin Limited (NASDAQ:UXIN), Matthews International Corp (NASDAQ:MATW), DHT Holdings Inc (NYSE:DHT), Yalla Group Limited (NYSE:YALA), Meridian Bancorp, Inc. (NASDAQ:EBSB), and Schweitzer-Mauduit International, Inc. (NYSE:SWM). This group of stocks’ market values match ACRS’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 11.4 hedge funds with bullish positions and the average amount invested in these stocks was $117 million. That figure was $470 million in ACRS’s case. Anterix Inc. (NASDAQ:ATEX) is the most popular stock in this table. On the other hand Yalla Group Limited (NYSE:YALA) is the least popular one with only 4 bullish hedge fund positions. Compared to these stocks Aclaris Therapeutics, Inc. (NASDAQ:ACRS) is more popular among hedge funds. Our overall hedge fund sentiment score for ACRS is 83.2. 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 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, ACRS wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ACRS were disappointed as the stock returned -39.3% since the end of the third quarter (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.