“Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn’t by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today’s darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn’t attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal,” said Vilas Fund in its Q1 investor letter. We aren’t sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. That’s why we believe it would be worthwhile to take a look at the hedge fund sentiment on Synthorx, Inc. (NASDAQ:THOR) in order to identify whether reputable and successful top money managers continue to believe in its potential.
Synthorx, Inc. (NASDAQ:THOR) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 7 hedge funds’ portfolios at the end of the third quarter of 2019. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as eXp World Holdings, Inc. (NASDAQ:EXPI), Repay Holdings Corporation (NASDAQ:RPAY), and Catchmark Timber Trust Inc (NYSE:CTT) to gather more data points. Our calculations also showed that THOR 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.
Today there are plenty of gauges stock market investors use to evaluate publicly traded companies. A duo of the most under-the-radar gauges are hedge fund and insider trading activity. Our researchers have shown that, historically, those who follow the best picks of the elite investment managers can trounce the S&P 500 by a healthy margin (see the details here).
Peter Kolchinsky of RA Capital Management
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. We’re going to take a peek at the fresh hedge fund action encompassing Synthorx, Inc. (NASDAQ:THOR).
How have hedgies been trading Synthorx, Inc. (NASDAQ:THOR)?
At Q3’s end, a total of 7 of the hedge funds tracked by Insider Monkey were long this stock, a change of 0% from the second quarter of 2019. The graph below displays the number of hedge funds with bullish position in THOR over the last 17 quarters. 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 Insider Monkey’s hedge fund database, Peter Kolchinsky’s RA Capital Management has the most valuable position in Synthorx, Inc. (NASDAQ:THOR), worth close to $158.2 million, amounting to 9.4% of its total 13F portfolio. The second largest stake is held by OrbiMed Advisors, managed by Samuel Isaly, which holds a $86.5 million position; the fund has 1.6% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that are bullish consist of Stephen DuBois’s Camber Capital Management, James A. Silverman’s Opaleye Management and James Thomas Berylson’s Berylson Capital Partners. In terms of the portfolio weights assigned to each position RA Capital Management allocated the biggest weight to Synthorx, Inc. (NASDAQ:THOR), around 9.43% of its 13F portfolio. Berylson Capital Partners is also relatively very bullish on the stock, setting aside 4.26 percent of its 13F equity portfolio to THOR.
Earlier we told you that the aggregate hedge fund interest in the stock was unchanged and we view this as a negative development. Even though there weren’t any hedge funds dumping their holdings during the third quarter, there weren’t any hedge funds initiating brand new positions. This indicates that hedge funds, at the very best, perceive this stock as dead money and they haven’t identified any viable catalysts that can attract investor attention.
Let’s check out hedge fund activity in other stocks similar to Synthorx, Inc. (NASDAQ:THOR). We will take a look at eXp World Holdings, Inc. (NASDAQ:EXPI), Repay Holdings Corporation (NASDAQ:RPAY), Catchmark Timber Trust Inc (NYSE:CTT), and FutureFuel Corp. (NYSE:FF). This group of stocks’ market caps are closest to THOR’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EXPI | 5 | 4434 | 3 |
| RPAY | 9 | 61061 | -3 |
| CTT | 11 | 63571 | 2 |
| FF | 10 | 45499 | -1 |
| Average | 8.75 | 43641 | 0.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 8.75 hedge funds with bullish positions and the average amount invested in these stocks was $44 million. That figure was $281 million in THOR’s case. Catchmark Timber Trust Inc (NYSE:CTT) is the most popular stock in this table. On the other hand eXp World Holdings, Inc. (NASDAQ:EXPI) is the least popular one with only 5 bullish hedge fund positions. Synthorx, Inc. (NASDAQ:THOR) is not the least popular stock in this group but hedge fund interest is still below average. Our calculations showed that top 20 most popular stocks among hedge funds returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. A small number of hedge funds were also right about betting on THOR, though not to the same extent, as the stock returned 10% during the first two months of the fourth quarter and outperformed the market.
Disclosure: None. This article was originally published at Insider Monkey.
