Hedge fund managers like David Einhorn, Bill Ackman, or Carl Icahn became billionaires through reaping large profits for their investors, which is why piggybacking their stock picks may provide us with significant returns as well. Many hedge funds, like Paul Singer’s Elliott Management, are pretty secretive, but we can still get some insights by analyzing their quarterly 13F filings. One of the most fertile grounds for large abnormal returns is hedge funds’ most popular small-cap picks, which are not so widely followed and often trade at a discount to their intrinsic value. In this article we will check out hedge fund activity in another small-cap stock: Audentes Therapeutics, Inc. (NASDAQ:BOLD).
Is Audentes Therapeutics, Inc. (NASDAQ:BOLD) ready to rally soon? Money managers are getting more bullish. The number of long hedge fund bets inched up by 7 recently. Our calculations also showed that bold isn’t among the 30 most popular stocks among hedge funds.
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’ large-cap stock picks indeed failed to beat the market between 1999 and 2016. However, we were able to identify in advance a select group of hedge fund holdings that outperformed the market by 32 percentage points since May 2014 through March 12, 2019 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 27.5% through March 12, 2019. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Let’s go over the key hedge fund action surrounding Audentes Therapeutics, Inc. (NASDAQ:BOLD).
Hedge fund activity in Audentes Therapeutics, Inc. (NASDAQ:BOLD)
At the end of the fourth quarter, a total of 24 of the hedge funds tracked by Insider Monkey were long this stock, a change of 41% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards BOLD over the last 14 quarters. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
Among these funds, Partner Fund Management held the most valuable stake in Audentes Therapeutics, Inc. (NASDAQ:BOLD), which was worth $64.4 million at the end of the fourth quarter. On the second spot was Redmile Group which amassed $49.1 million worth of shares. Moreover, OrbiMed Advisors, Great Point Partners, and Citadel Investment Group were also bullish on Audentes Therapeutics, Inc. (NASDAQ:BOLD), allocating a large percentage of their portfolios to this stock.
With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Great Point Partners, managed by Jeffrey Jay and David Kroin, assembled the biggest position in Audentes Therapeutics, Inc. (NASDAQ:BOLD). Great Point Partners had $35.3 million invested in the company at the end of the quarter. Israel Englander’s Millennium Management also made a $12.6 million investment in the stock during the quarter. The other funds with brand new BOLD positions are Steve Cohen’s Point72 Asset Management, Ken Greenberg and David Kim’s Ghost Tree Capital, and Jacob Doft’s Highline Capital Management.
Let’s now review hedge fund activity in other stocks similar to Audentes Therapeutics, Inc. (NASDAQ:BOLD). These stocks are Intrexon Corp (NASDAQ:XON), C&J Energy Services, Inc (NYSE:CJ), NCI Building Systems, Inc. (NYSE:NCS), and Coeur Mining, Inc. (NYSE:CDE). This group of stocks’ market values match BOLD’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| XON | 10 | 29347 | 1 |
| CJ | 25 | 254818 | 0 |
| NCS | 20 | 74692 | -8 |
| CDE | 13 | 44363 | 0 |
| Average | 17 | 100805 | -1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 17 hedge funds with bullish positions and the average amount invested in these stocks was $101 million. That figure was $350 million in BOLD’s case. C&J Energy Services, Inc (NYSE:CJ) is the most popular stock in this table. On the other hand Intrexon Corp (NASDAQ:XON) is the least popular one with only 10 bullish hedge fund positions. Audentes Therapeutics, Inc. (NASDAQ:BOLD) is not the most popular stock in this group but hedge fund interest is still above average. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Hedge funds were also right about betting on BOLD as the stock returned 85.4% and outperformed the market by an even larger margin. Hedge funds were rewarded for their relative bullishness.
Disclosure: None. This article was originally published at Insider Monkey.
