Do Hedge Funds Love Adaptive Biotechnologies Corporation (ADPT)?

Although the masses and most of the financial media blame hedge funds for their exorbitant fee structure and disappointing performance, these investors have proved to have great stock picking abilities over the years (that’s why their assets under management continue to swell). We believe hedge fund sentiment should serve as a crucial tool of an individual investor’s stock selection process, as it may offer great insights of how the brightest minds of the finance industry feel about specific stocks. After all, these people have access to the smartest analysts and expensive data/information sources that individual investors can’t match. So should one consider investing in Adaptive Biotechnologies Corporation (NASDAQ:ADPT)? The smart money sentiment can provide an answer to this question.

Adaptive Biotechnologies Corporation (NASDAQ:ADPT) investors should pay attention to a decrease in support from the world’s most elite money managers lately. Adaptive Biotechnologies Corporation (NASDAQ:ADPT) was in 25 hedge funds’ portfolios at the end of September. The all time high for this statistic is 38. Our calculations also showed that ADPT 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. Now let’s review the new hedge fund action surrounding Adaptive Biotechnologies Corporation (NASDAQ:ADPT).

Julian Robertson of Tiger Management

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

Heading into the fourth quarter of 2021, a total of 25 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of -7% from the previous quarter. The graph below displays the number of hedge funds with bullish position in ADPT over the last 25 quarters. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were increasing their stakes significantly (or already accumulated large positions).

More specifically, Viking Global was the largest shareholder of Adaptive Biotechnologies Corporation (NASDAQ:ADPT), with a stake worth $1019.5 million reported as of the end of September. Trailing Viking Global was Matrix Capital Management, which amassed a stake valued at $393.4 million. ARK Investment Management, Casdin Capital, and Tiger Management 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 Tiger Management allocated the biggest weight to Adaptive Biotechnologies Corporation (NASDAQ:ADPT), around 7.02% of its 13F portfolio. Matrix Capital Management is also relatively very bullish on the stock, setting aside 4.48 percent of its 13F equity portfolio to ADPT.

Due to the fact that Adaptive Biotechnologies Corporation (NASDAQ:ADPT) has faced declining sentiment from hedge fund managers, it’s easy to see that there exists a select few money managers that elected to cut their positions entirely in the third quarter. Interestingly, Masayoshi Son’s SB Management said goodbye to the biggest stake of all the hedgies followed by Insider Monkey, worth close to $50.7 million in stock, and Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management was right behind this move, as the fund sold off about $26.6 million worth. These moves are important to note, as total hedge fund interest dropped by 2 funds in the third quarter.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Adaptive Biotechnologies Corporation (NASDAQ:ADPT) but similarly valued. These stocks are Dada Nexus Limited (NASDAQ:DADA), Blackstone Mortgage Trust Inc (NYSE:BXMT), Seaboard Corporation (NYSE:SEB), Premier Inc (NASDAQ:PINC), SL Green Realty Corp (NYSE:SLG), TG Therapeutics Inc (NASDAQ:TGTX), and Gates Industrial Corporation plc (NYSE:GTES). All of these stocks’ market caps resemble ADPT’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 18.4 hedge funds with bullish positions and the average amount invested in these stocks was $210 million. That figure was $1776 million in ADPT’s case. Gates Industrial Corporation plc (NYSE:GTES) is the most popular stock in this table. On the other hand Dada Nexus Limited (NASDAQ:DADA) is the least popular one with only 13 bullish hedge fund positions. Adaptive Biotechnologies Corporation (NASDAQ:ADPT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ADPT is 60.2. 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. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. 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 31.1% in 2021 through December 9th and beat the market again by 5.1 percentage points. Unfortunately ADPT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ADPT were disappointed as the stock returned -19.4% since the end of September (through 12/9) 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 many of these stocks already outperformed the market since 2019.

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