A whopping number of 13F filings filed with U.S. Securities and Exchange Commission has been processed by Insider Monkey so that individual investors can look at the overall hedge fund sentiment towards the stocks included in their watchlists. These freshly-submitted public filings disclose money managers’ equity positions as of the end of the three-month period that ended June 30th, so let’s proceed with the discussion of the hedge fund sentiment on CRISPR Therapeutics AG (NASDAQ:CRSP).
CRISPR Therapeutics AG (NASDAQ:CRSP) has seen an increase in hedge fund interest recently. CRISPR Therapeutics AG (NASDAQ:CRSP) was in 34 hedge funds’ portfolios at the end of June. The all time high for this statistic is 34. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CRSP isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
So, why do we pay attention to hedge fund sentiment before making any investment decisions? Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). We have been able to outperform the passive index funds by tracking the moves of corporate insiders and hedge funds, and we believe small investors can benefit a lot from reading hedge fund investor letters and 13F filings.
Peter Rathjens of Arrowstreet 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. With all of this in mind we’re going to take a look at the latest hedge fund action encompassing CRISPR Therapeutics AG (NASDAQ:CRSP).
Do Hedge Funds Think CRSP Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 34 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 26% from the previous quarter. By comparison, 31 hedge funds held shares or bullish call options in CRSP a year ago. With hedge funds’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Catherine D. Wood’s ARK Investment Management has the number one position in CRISPR Therapeutics AG (NASDAQ:CRSP), worth close to $1.2589 billion, comprising 2.3% of its total 13F portfolio. The second most bullish fund manager is John Overdeck and David Siegel of Two Sigma Advisors, with a $146.5 million position; 0.4% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that hold long positions consist of OrbiMed Advisors, and Christopher R. Hansen’s Valiant Capital. In terms of the portfolio weights assigned to each position Valiant Capital allocated the biggest weight to CRISPR Therapeutics AG (NASDAQ:CRSP), around 3.74% of its 13F portfolio. Soleus Capital is also relatively very bullish on the stock, designating 2.57 percent of its 13F equity portfolio to CRSP.
With a general bullishness amongst the heavyweights, key hedge funds were leading the bulls’ herd. Himension Capital, managed by Jay Chen, established the biggest position in CRISPR Therapeutics AG (NASDAQ:CRSP). Himension Capital had $25.5 million invested in the company at the end of the quarter. Guy Levy’s Soleus Capital also made a $16.7 million investment in the stock during the quarter. The other funds with brand new CRSP positions are Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital, Doug Gordon, Jon Hilsabeck and Don Jabro’s Shellback Capital, and Mark Hart III’s Corriente Advisors.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as CRISPR Therapeutics AG (NASDAQ:CRSP) but similarly valued. These stocks are Teck Resources Ltd (NYSE:TECK), Iron Mountain Incorporated (NYSE:IRM), InterContinental Hotels Group PLC (NYSE:IHG), Black Knight, Inc. (NYSE:BKI), Ozon Holdings PLC (NASDAQ:OZON), Dr. Reddy’s Laboratories Limited (NYSE:RDY), and Jack Henry & Associates, Inc. (NASDAQ:JKHY). All of these stocks’ market caps resemble CRSP’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TECK | 40 | 1277433 | 10 |
| IRM | 25 | 81927 | 9 |
| IHG | 6 | 10475 | -2 |
| BKI | 33 | 995228 | -7 |
| OZON | 19 | 190660 | 2 |
| RDY | 11 | 188216 | -1 |
| JKHY | 22 | 180204 | 2 |
| Average | 22.3 | 417735 | 1.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 22.3 hedge funds with bullish positions and the average amount invested in these stocks was $418 million. That figure was $1762 million in CRSP’s case. Teck Resources Ltd (NYSE:TECK) is the most popular stock in this table. On the other hand InterContinental Hotels Group PLC (NYSE:IHG) is the least popular one with only 6 bullish hedge fund positions. CRISPR Therapeutics AG (NASDAQ:CRSP) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for CRSP is 81.2. 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 CRSP wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CRSP were disappointed as the stock returned -37.8% 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 Crispr Therapeutics Ag (NASDAQ:CRSP)
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Disclosure: None. This article was originally published at Insider Monkey.
