The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 821 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, a week after the market trough. Now, we are almost done with the second quarter. Investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned almost 20% this quarter. In this article you are going to find out whether hedge funds thoughtAC Immune SA (NASDAQ:ACIU) was a good investment heading into the second quarter and how the stock traded in comparison to the top hedge fund picks.
AC Immune SA (NASDAQ:ACIU) was in 11 hedge funds’ portfolios at the end of the first quarter of 2020. ACIU has experienced an increase in enthusiasm from smart money of late. There were 10 hedge funds in our database with ACIU holdings at the end of the previous quarter. Our calculations also showed that ACIU isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings and see the video for a quick look at the top 5 stocks).
Video: 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 monthly stock picks returned 101% since March 2017 and outperformed the S&P 500 ETFs by more than 58 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.
Dmitry Balyasny of Balyasny Asset Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. There is a lot of volatility in the markets and this presents amazing investment opportunities from time to time. For example, this trader claims to deliver juiced up returns with one trade a week, so we are checking out his highest conviction idea. A second trader claims to score lucrative profits by utilizing a “weekend trading strategy”, so we look into his strategy’s picks. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We recently recommended several stocks partly inspired by legendary Bill Miller’s investor letter. Our best call in 2020 was shorting the market when the S&P 500 was trading at 3150 in February after realizing the coronavirus pandemic’s significance before most investors. Now let’s check out the recent hedge fund action encompassing AC Immune SA (NASDAQ:ACIU).
What does smart money think about AC Immune SA (NASDAQ:ACIU)?
At the end of the first quarter, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 10% from the fourth quarter of 2019. Below, you can check out the change in hedge fund sentiment towards ACIU over the last 18 quarters. With the smart money’s positions undergoing their usual ebb and flow, there exists an “upper tier” of notable hedge fund managers who were boosting their stakes substantially (or already accumulated large positions).
The largest stake in AC Immune SA (NASDAQ:ACIU) was held by Biotechnology Value Fund / BVF Inc, which reported holding $78.4 million worth of stock at the end of September. It was followed by Prosight Capital with a $7.3 million position. Other investors bullish on the company included Renaissance Technologies, Millennium Management, and Arrowstreet Capital. In terms of the portfolio weights assigned to each position Biotechnology Value Fund / BVF Inc allocated the biggest weight to AC Immune SA (NASDAQ:ACIU), around 7.31% of its 13F portfolio. Prosight Capital is also relatively very bullish on the stock, setting aside 3.42 percent of its 13F equity portfolio to ACIU.
As one would reasonably expect, specific money managers were breaking ground themselves. D E Shaw, managed by D. E. Shaw, established the most outsized position in AC Immune SA (NASDAQ:ACIU). D E Shaw had $0.3 million invested in the company at the end of the quarter. Greg Eisner’s Engineers Gate Manager also made a $0.1 million investment in the stock during the quarter. The only other fund with a new position in the stock is John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as AC Immune SA (NASDAQ:ACIU) but similarly valued. These stocks are HudBay Minerals Inc (NYSE:HBM), National Presto Industries Inc. (NYSE:NPK), Kelly Services, Inc. (NASDAQ:KELYA), and Thermon Group Holdings, Inc. (NYSE:THR). This group of stocks’ market values are closest to ACIU’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HBM | 8 | 102094 | -3 |
| NPK | 6 | 52289 | -5 |
| KELYA | 13 | 13558 | 1 |
| THR | 11 | 24611 | -3 |
| Average | 9.5 | 48138 | -2.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.5 hedge funds with bullish positions and the average amount invested in these stocks was $48 million. That figure was $97 million in ACIU’s case. Kelly Services, Inc. (NASDAQ:KELYA) is the most popular stock in this table. On the other hand National Presto Industries Inc. (NYSE:NPK) is the least popular one with only 6 bullish hedge fund positions. AC Immune SA (NASDAQ:ACIU) is not the most popular stock in this group but hedge fund interest is still above average. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 12.3% in 2020 through June 30th but beat the market by 15.5 percentage points. Unfortunately ACIU wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on ACIU were disappointed as the stock returned -2.6% during the same time period and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
