Hedge Funds Are Crazy About Aclaris Therapeutics, Inc. (ACRS)

Last year we predicted the arrival of the first US recession since 2009 and we told in advance that the market will decline by at least 20% in (Recession is Imminent: We Need A Travel Ban NOW). In these volatile markets we scrutinize hedge fund filings to get a reading on which direction each stock might be going. In this article, we will take a closer look at hedge fund sentiment towards Aclaris Therapeutics, Inc. (NASDAQ:ACRS).

Is Aclaris Therapeutics, Inc. (NASDAQ:ACRS) a buy, sell, or hold? Investors who are in the know were betting on the stock. The number of long hedge fund bets advanced by 7 lately. Aclaris Therapeutics, Inc. (NASDAQ:ACRS) was in 37 hedge funds’ portfolios at the end of the second quarter of 2021. The all time high for this statistic was previously 30. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that ACRS isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Why do we pay any attention at all to hedge fund sentiment? Our research has shown that a select group of hedge fund holdings outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.

Jim Tananbaum of Foresite Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, we like undervalued, EBITDA-positive growth stocks, so we are checking out stock pitches like this emerging biotech stock. 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. 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 we’re going to take a glance at the key hedge fund action encompassing Aclaris Therapeutics, Inc. (NASDAQ:ACRS).

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

At the end of June, a total of 37 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 23% from the previous quarter. On the other hand, there were a total of 18 hedge funds with a bullish position in ACRS a year ago. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

When looking at the institutional investors followed by Insider Monkey, Rock Springs Capital Management, managed by Kris Jenner, Gordon Bussard, Graham McPhail, holds the number one position in Aclaris Therapeutics, Inc. (NASDAQ:ACRS). Rock Springs Capital Management has a $66.1 million position in the stock, comprising 1.3% of its 13F portfolio. The second largest stake is held by Renaissance Technologies, holding a $42.7 million position; 0.1% of its 13F portfolio is allocated to the company. Remaining peers that are bullish contain Phill Gross and Robert Atchinson’s Adage Capital Management, Bihua Chen’s Cormorant Asset Management and Jim Tananbaum’s Foresite Capital. In terms of the portfolio weights assigned to each position Foresite Capital allocated the biggest weight to Aclaris Therapeutics, Inc. (NASDAQ:ACRS), around 36.39% of its 13F portfolio. Commodore Capital is also relatively very bullish on the stock, setting aside 10.09 percent of its 13F equity portfolio to ACRS.

Now, key money managers have been driving this bullishness. Biotechnology Value Fund / BVF Inc, managed by Mark Lampert, initiated the biggest position in Aclaris Therapeutics, Inc. (NASDAQ:ACRS). Biotechnology Value Fund / BVF Inc had $17.6 million invested in the company at the end of the quarter. Arsani William’s Logos Capital also made a $11.9 million investment in the stock during the quarter. The following funds were also among the new ACRS investors: OrbiMed Advisors, Bhagwan Jay Rao’s Integral Health Asset Management, and D. E. Shaw’s D E Shaw.

Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Aclaris Therapeutics, Inc. (NASDAQ:ACRS) but similarly valued. These stocks are Party City Holdco Inc (NYSE:PRTY), Kraton Corporation (NYSE:KRA), Immunovant, Inc. (NASDAQ:IMVT), Ferroglobe PLC (NASDAQ:GSM), AngioDynamics, Inc. (NASDAQ:ANGO), TPG RE Finance Trust, Inc. (NYSE:TRTX), and SI-BONE, Inc. (NASDAQ:SIBN). All of these stocks’ market caps are similar to ACRS’s market cap.

View table here if you experience formatting issues.

As you can see these stocks had an average of 19.9 hedge funds with bullish positions and the average amount invested in these stocks was $146 million. That figure was $476 million in ACRS’s case. SI-BONE, Inc. (NASDAQ:SIBN) is the most popular stock in this table. On the other hand TPG RE Finance Trust, Inc. (NYSE:TRTX) is the least popular one with only 10 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 90. 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 21.8% in 2021 through October 11th and still beat the market by 4.4 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 0.2% since the end of the second quarter (through 10/11) 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 most of these stocks already outperformed the market since 2019.

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