Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 900 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Intellia Therapeutics, Inc. (NASDAQ:NTLA) in this article.
Is Intellia Therapeutics, Inc. (NASDAQ:NTLA) a good investment now? Investors who are in the know were taking an optimistic view. The number of long hedge fund bets increased by 12 recently. Intellia Therapeutics, Inc. (NASDAQ:NTLA) was in 41 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 NTLA isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings). There were 29 hedge funds in our database with NTLA positions at the end of the first quarter.
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 185.4% since March 2017 and outperformed the S&P 500 ETFs by more than 79 percentage points (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Richard Driehaus of Driehaus 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. Keeping this in mind let’s go over the recent hedge fund action encompassing Intellia Therapeutics, Inc. (NASDAQ:NTLA).
Do Hedge Funds Think NTLA Is A Good Stock To Buy Now?
At the end of June, a total of 41 of the hedge funds tracked by Insider Monkey were long this stock, a change of 41% from the first quarter of 2020. By comparison, 17 hedge funds held shares or bullish call options in NTLA a year ago. So, let’s find out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, ARK Investment Management was the largest shareholder of Intellia Therapeutics, Inc. (NASDAQ:NTLA), with a stake worth $1244.2 million reported as of the end of June. Trailing ARK Investment Management was Darwin Global Management, which amassed a stake valued at $301.1 million. Viking Global, Adage Capital Management, 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 Darwin Global Management allocated the biggest weight to Intellia Therapeutics, Inc. (NASDAQ:NTLA), around 48.58% of its 13F portfolio. Burrage Capital Management is also relatively very bullish on the stock, earmarking 10.33 percent of its 13F equity portfolio to NTLA.
As industrywide interest jumped, key hedge funds were breaking ground themselves. Darwin Global Management, managed by Abhishek Trehan, assembled the most valuable position in Intellia Therapeutics, Inc. (NASDAQ:NTLA). Darwin Global Management had $301.1 million invested in the company at the end of the quarter. Andreas Halvorsen’s Viking Global also initiated a $157.9 million position during the quarter. The following funds were also among the new NTLA investors: Phill Gross and Robert Atchinson’s Adage Capital Management, Richard Driehaus’s Driehaus Capital, and Efrem Kamen’s Pura Vida Investments.
Let’s check out hedge fund activity in other stocks similar to Intellia Therapeutics, Inc. (NASDAQ:NTLA). These stocks are Darling Ingredients Inc. (NYSE:DAR), Lightspeed Commerce Inc. (NYSE:LSPD), Repligen Corporation (NASDAQ:RGEN), ICON Public Limited Company (NASDAQ:ICLR), Magellan Midstream Partners, L.P. (NYSE:MMP), Teva Pharmaceutical Industries Limited (NYSE:TEVA), and Regency Centers Corp (NASDAQ:REG). All of these stocks’ market caps are closest to NTLA’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| DAR | 41 | 839147 | 8 |
| LSPD | 29 | 649487 | 8 |
| RGEN | 35 | 1285346 | -3 |
| ICLR | 39 | 1301455 | 10 |
| MMP | 13 | 89137 | -1 |
| TEVA | 22 | 947100 | -2 |
| REG | 25 | 192591 | 8 |
| Average | 29.1 | 757752 | 4 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 29.1 hedge funds with bullish positions and the average amount invested in these stocks was $758 million. That figure was $2282 million in NTLA’s case. Darling Ingredients Inc. (NYSE:DAR) is the most popular stock in this table. On the other hand Magellan Midstream Partners, L.P. (NYSE:MMP) is the least popular one with only 13 bullish hedge fund positions. Intellia Therapeutics, Inc. (NASDAQ:NTLA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NTLA 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. 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 21.8% in 2021 through October 11th and beat the market again by 4.4 percentage points. Unfortunately NTLA wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on NTLA were disappointed as the stock returned -22.2% since the end of June (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 many of these stocks already outperformed the market since 2019.
Follow Intellia Therapeutics Inc. (NASDAQ:NTLA)
Follow Intellia Therapeutics Inc. (NASDAQ:NTLA)
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Disclosure: None. This article was originally published at Insider Monkey.
