We at Insider Monkey have gone over 752 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of September 30th. In this article, we look at what those funds think of Aduro BioTech Inc (NASDAQ:ADRO) based on that data.
Is Aduro BioTech Inc (NASDAQ:ADRO) worth your attention right now? Hedge funds are betting on the stock. The number of long hedge fund positions increased by 1 lately. Our calculations also showed that ADRO isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings). ADRO was in 9 hedge funds’ portfolios at the end of the third quarter of 2019. There were 8 hedge funds in our database with ADRO positions at the end of the previous quarter.
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
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 flagship best performing hedge funds strategy returned 91% since May 2014 and outperformed the Russell 2000 ETFs by nearly 40 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Paul Marshall of Marshall Wace
We leave no stone unturned when looking for the next great investment idea. For example Europe is set to become the world’s largest cannabis market, so we check out this European marijuana stock pitch. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We also rely on the best performing hedge funds‘ buy/sell signals. We’re going to take a look at the latest hedge fund action surrounding Aduro BioTech Inc (NASDAQ:ADRO).
How have hedgies been trading Aduro BioTech Inc (NASDAQ:ADRO)?
At the end of the third quarter, a total of 9 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 13% from the previous quarter. By comparison, 7 hedge funds held shares or bullish call options in ADRO a year ago. With hedgies’ capital changing hands, there exists a select group of key hedge fund managers who were boosting their stakes significantly (or already accumulated large positions).
Among these funds, Renaissance Technologies held the most valuable stake in Aduro BioTech Inc (NASDAQ:ADRO), which was worth $2.9 million at the end of the third quarter. On the second spot was AQR Capital Management which amassed $1.3 million worth of shares. Biotechnology Value Fund, Harvard Management Co, and Two Sigma Advisors 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 Biotechnology Value Fund allocated the biggest weight to Aduro BioTech Inc (NASDAQ:ADRO), around 0.11% of its 13F portfolio. Harvard Management Co is also relatively very bullish on the stock, designating 0.06 percent of its 13F equity portfolio to ADRO.
Now, some big names were breaking ground themselves. Biotechnology Value Fund, managed by Mark Lampert, created the biggest position in Aduro BioTech Inc (NASDAQ:ADRO). Biotechnology Value Fund had $1.1 million invested in the company at the end of the quarter. David E. Shaw’s D E Shaw also made a $0.2 million investment in the stock during the quarter. The only other fund with a new position in the stock is Paul Marshall and Ian Wace’s Marshall Wace.
Let’s check out hedge fund activity in other stocks similar to Aduro BioTech Inc (NASDAQ:ADRO). We will take a look at NeuBase Therapeutics, Inc. (NASDAQ:NBSE), Randolph Bancorp, Inc. (NASDAQ:RNDB), Portman Ridge Finance Corporation (NASDAQ:PTMN), and MSB Financial Corp. (NASDAQ:MSBF). This group of stocks’ market valuations are similar to ADRO’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NBSE | 2 | 8962 | 0 |
| RNDB | 2 | 6691 | 0 |
| PTMN | 3 | 1093 | -1 |
| MSBF | 3 | 13893 | 0 |
| Average | 2.5 | 7660 | -0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 2.5 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $7 million in ADRO’s case. Portman Ridge Finance Corporation (NASDAQ:PTMN) is the most popular stock in this table. On the other hand NeuBase Therapeutics, Inc. (NASDAQ:NBSE) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Aduro BioTech Inc (NASDAQ:ADRO) is more popular among hedge funds. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Hedge funds were also right about betting on ADRO as the stock returned 12.3% during the first two months of Q4 and outperformed the market by an even larger margin. Hedge funds were clearly right about piling into this stock relative to other stocks with similar market capitalizations.
Disclosure: None. This article was originally published at Insider Monkey.
