How do we determine whether DBV Technologies SA – ADR (NASDAQ:DBVT) makes for a good investment at the moment? We analyze the sentiment of a select group of the very best investors in the world, who spend immense amounts of time and resources studying companies. They may not always be right (no one is), but data shows that their consensus long positions have historically outperformed the market when we adjust for known risk factors.
DBV Technologies SA – ADR (NASDAQ:DBVT) has experienced a decrease in activity from the world’s largest hedge funds in recent months. DBVT was in 7 hedge funds’ portfolios at the end of the third quarter of 2019. There were 10 hedge funds in our database with DBVT holdings at the end of the previous quarter. Our calculations also showed that DBVT isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
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.
Felix Baker of Baker Bros.
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. Let’s check out the key hedge fund action regarding DBV Technologies SA – ADR (NASDAQ:DBVT).
What have hedge funds been doing with DBV Technologies SA – ADR (NASDAQ:DBVT)?
Heading into the fourth quarter of 2019, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of -30% from the second quarter of 2019. On the other hand, there were a total of 9 hedge funds with a bullish position in DBVT a year ago. So, let’s see which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Julian Baker and Felix Baker’s Baker Bros. Advisors has the number one position in DBV Technologies SA – ADR (NASDAQ:DBVT), worth close to $47.4 million, corresponding to 0.3% of its total 13F portfolio. The second largest stake is held by Joseph Edelman of Perceptive Advisors, with a $31 million position; 0.8% of its 13F portfolio is allocated to the company. Other professional money managers that are bullish encompass James E. Flynn’s Deerfield Management, Steve Cohen’s Point72 Asset Management and Albert Cha and Frank Kung’s Vivo Capital. In terms of the portfolio weights assigned to each position Deerfield Management allocated the biggest weight to DBV Technologies SA – ADR (NASDAQ:DBVT), around 1.12% of its 13F portfolio. Perceptive Advisors is also relatively very bullish on the stock, designating 0.84 percent of its 13F equity portfolio to DBVT.
Due to the fact that DBV Technologies SA – ADR (NASDAQ:DBVT) has faced bearish sentiment from the entirety of the hedge funds we track, logic holds that there were a few fund managers that elected to cut their positions entirely in the third quarter. Intriguingly, Thomas Bailard’s Bailard Inc cut the largest investment of all the hedgies watched by Insider Monkey, worth close to $1.9 million in stock. Israel Englander’s fund, Millennium Management, also said goodbye to its stock, about $0.4 million worth. These bearish behaviors are interesting, as aggregate hedge fund interest dropped by 3 funds in the third quarter.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as DBV Technologies SA – ADR (NASDAQ:DBVT) but similarly valued. We will take a look at Anterix Inc. (NASDAQ:ATEX), Echo Global Logistics, Inc. (NASDAQ:ECHO), Tristate Capital Holdings Inc (NASDAQ:TSC), and SurModics, Inc. (NASDAQ:SRDX). This group of stocks’ market caps are closest to DBVT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| ATEX | 11 | 317816 | 2 |
| ECHO | 20 | 32815 | 8 |
| TSC | 9 | 42321 | -1 |
| SRDX | 13 | 138577 | -1 |
| Average | 13.25 | 132882 | 2 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $133 million. That figure was $113 million in DBVT’s case. Echo Global Logistics, Inc. (NASDAQ:ECHO) is the most popular stock in this table. On the other hand Tristate Capital Holdings Inc (NASDAQ:TSC) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks DBV Technologies SA – ADR (NASDAQ:DBVT) is even less popular than TSC. Hedge funds dodged a bullet by taking a bearish stance towards DBVT. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately DBVT wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); DBVT investors were disappointed as the stock returned -9.3% during the fourth quarter (through the end of November) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
