Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors’ consensus returns have been exceptional. In the following paragraphs, we find out what the billionaire investors and hedge funds think of Trillium Therapeutics Inc. (NASDAQ:TRIL).
Trillium Therapeutics Inc. (NASDAQ:TRIL) was in 27 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 36. TRIL has experienced a decrease in enthusiasm from smart money lately. There were 36 hedge funds in our database with TRIL holdings at the end of December. Our calculations also showed that TRIL isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. 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 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.
Peter Kolchinsky of RA Capital Management
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, economists warn of inflation flare up. So, we are checking out this backdoor gold play that has hit peak gains of 718% in a little over a year. We go through lists like the 10 best battery 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 gander at the recent hedge fund action encompassing Trillium Therapeutics Inc. (NASDAQ:TRIL).
Do Hedge Funds Think TRIL Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 27 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -25% from the fourth quarter of 2020. Below, you can check out the change in hedge fund sentiment towards TRIL over the last 23 quarters. With hedgies’ sentiment swirling, there exists an “upper tier” of notable hedge fund managers who were adding to their stakes meaningfully (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Avoro Capital Advisors (venBio Select Advisor), managed by Behzad Aghazadeh, holds the number one position in Trillium Therapeutics Inc. (NASDAQ:TRIL). Avoro Capital Advisors (venBio Select Advisor) has a $61.2 million position in the stock, comprising 1.1% of its 13F portfolio. The second most bullish fund manager is RA Capital Management, led by Peter Kolchinsky, holding a $56.8 million position; 0.9% of its 13F portfolio is allocated to the stock. Other peers that are bullish contain Ken Griffin’s Citadel Investment Group, OrbiMed Advisors and Alan Frazier’s Frazier Healthcare Partners. In terms of the portfolio weights assigned to each position Ghost Tree Capital allocated the biggest weight to Trillium Therapeutics Inc. (NASDAQ:TRIL), around 4.92% of its 13F portfolio. Commodore Capital is also relatively very bullish on the stock, earmarking 3.36 percent of its 13F equity portfolio to TRIL.
Seeing as Trillium Therapeutics Inc. (NASDAQ:TRIL) has faced falling interest from hedge fund managers, it’s easy to see that there is a sect of hedge funds that elected to cut their entire stakes in the first quarter. It’s worth mentioning that Brian Ashford-Russell and Tim Woolley’s Polar Capital dumped the biggest position of all the hedgies monitored by Insider Monkey, comprising an estimated $22.5 million in stock. Christopher James’s fund, Partner Fund Management, also said goodbye to its stock, about $8.8 million worth. These bearish behaviors are important to note, as total hedge fund interest was cut by 9 funds in the first quarter.
Let’s now take a look at hedge fund activity in other stocks similar to Trillium Therapeutics Inc. (NASDAQ:TRIL). We will take a look at Omeros Corporation (NASDAQ:OMER), American Axle & Manufacturing Holdings, Inc. (NYSE:AXL), Zumiez Inc. (NASDAQ:ZUMZ), Chase Corporation (NYSE:CCF), Boston Private Financial Hldg Inc (NASDAQ:BPFH), Tivity Health, Inc. (NASDAQ:TVTY), and MarineMax, Inc. (NYSE:HZO). All of these stocks’ market caps resemble TRIL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OMER | 12 | 129925 | 2 |
| AXL | 21 | 66993 | 1 |
| ZUMZ | 20 | 52649 | -1 |
| CCF | 9 | 90070 | -2 |
| BPFH | 24 | 182992 | 7 |
| TVTY | 24 | 381882 | 4 |
| HZO | 15 | 48512 | -3 |
| Average | 17.9 | 136146 | 1.1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17.9 hedge funds with bullish positions and the average amount invested in these stocks was $136 million. That figure was $344 million in TRIL’s case. Boston Private Financial Hldg Inc (NASDAQ:BPFH) is the most popular stock in this table. On the other hand Chase Corporation (NYSE:CCF) is the least popular one with only 9 bullish hedge fund positions. Compared to these stocks Trillium Therapeutics Inc. (NASDAQ:TRIL) is more popular among hedge funds. Our overall hedge fund sentiment score for TRIL is 68.5. 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 24% in 2021 through July 9th and still beat the market by 6.7 percentage points. Unfortunately TRIL wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on TRIL were disappointed as the stock returned -20.9% since the end of the first quarter (through 7/9) 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.
Follow Trillium Therapeutics Inc. (NASDAQ:TRIL)
Follow Trillium Therapeutics Inc. (NASDAQ:TRIL)
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Disclosure: None. This article was originally published at Insider Monkey.
