The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 866 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31st holdings, data that is available nowhere else. Should you consider Instil Bio, Inc. (NASDAQ:TIL) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Is Instil Bio, Inc. (NASDAQ:TIL) the right pick for your portfolio? The smart money was getting more bullish. The number of bullish hedge fund positions inched up by 21 in recent months. Instil Bio, Inc. (NASDAQ:TIL) was in 21 hedge funds’ portfolios at the end of March. Our calculations also showed that TIL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
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.
Peter Kolchinsky of RA Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, Chuck Schumer recently stated that marijuana legalization will be a Senate priority. So, we are checking out this under the radar stock that will benefit from this. 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. Now let’s take a look at the recent hedge fund action encompassing Instil Bio, Inc. (NASDAQ:TIL).
Do Hedge Funds Think TIL Is A Good Stock To Buy Now?
At the end of March, a total of 21 of the hedge funds tracked by Insider Monkey were long this stock, a change of 21 from the fourth quarter of 2020. By comparison, 0 hedge funds held shares or bullish call options in TIL a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Instil Bio, Inc. (NASDAQ:TIL) was held by Vivo Capital, which reported holding $313.2 million worth of stock at the end of December. It was followed by RA Capital Management with a $122.2 million position. Other investors bullish on the company included Baker Bros. Advisors, Hillhouse Capital Management, and Logos Capital. In terms of the portfolio weights assigned to each position Vivo Capital allocated the biggest weight to Instil Bio, Inc. (NASDAQ:TIL), around 11.01% of its 13F portfolio. Samsara BioCapital is also relatively very bullish on the stock, setting aside 7.19 percent of its 13F equity portfolio to TIL.
Consequently, some big names have been driving this bullishness. Vivo Capital, managed by Albert Cha and Frank Kung, initiated the largest position in Instil Bio, Inc. (NASDAQ:TIL). Vivo Capital had $313.2 million invested in the company at the end of the quarter. Peter Kolchinsky’s RA Capital Management also made a $122.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Julian Baker and Felix Baker’s Baker Bros. Advisors, Lei Zhang’s Hillhouse Capital Management, and Arsani William’s Logos Capital.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Instil Bio, Inc. (NASDAQ:TIL) but similarly valued. These stocks are BancorpSouth Bank (NYSE:BXS), Utz Brands Inc (NYSE:UTZ), Equity Commonwealth (NYSE:EQC), Cerence Inc. (NASDAQ:CRNC), Cantel Medical Corp. (NYSE:CMD), Korn Ferry (NYSE:KFY), and Atlas Corp. (NYSE:ATCO). This group of stocks’ market values are closest to TIL’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BXS | 12 | 66932 | -3 |
| UTZ | 13 | 110348 | -2 |
| EQC | 21 | 183175 | 3 |
| CRNC | 20 | 213371 | 6 |
| CMD | 30 | 592747 | 8 |
| KFY | 16 | 226581 | -1 |
| ATCO | 12 | 1424585 | -6 |
| Average | 17.7 | 402534 | 0.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.7 hedge funds with bullish positions and the average amount invested in these stocks was $403 million. That figure was $779 million in TIL’s case. Cantel Medical Corp. (NYSE:CMD) is the most popular stock in this table. On the other hand BancorpSouth Bank (NYSE:BXS) is the least popular one with only 12 bullish hedge fund positions. Instil Bio, Inc. (NASDAQ:TIL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TIL is 50. 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 23.8% in 2021 through July 16th and beat the market again by 7.7 percentage points. Unfortunately TIL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TIL were disappointed as the stock returned -24.6% since the end of March (through 7/16) 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.