The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. We have processed the filings of the more than 700 world-class investment firms that we track and now have access to the collective wisdom contained in these filings, which are based on their March 31 holdings, data that is available nowhere else. Should you consider Aurora Cannabis Inc. (NYSE:ACB) for your portfolio? We’ll look to this invaluable collective wisdom for the answer.
Aurora Cannabis Inc. (NYSE:ACB) shareholders have witnessed an increase in support from the world’s most elite money managers of late. ACB was in 11 hedge funds’ portfolios at the end of March. There were 9 hedge funds in our database with ACB positions at the end of the previous quarter. Our calculations also showed that acb 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’ 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 market by 40 percentage points since May 2014 through May 30, 2019 (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.
We’re going to take a glance at the fresh hedge fund action regarding Aurora Cannabis Inc. (NYSE:ACB).
Hedge fund activity in Aurora Cannabis Inc. (NYSE:ACB)
Heading into the second quarter of 2019, a total of 11 of the hedge funds tracked by Insider Monkey were long this stock, a change of 22% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards ACB over the last 15 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Among these funds, AQR Capital Management held the most valuable stake in Aurora Cannabis Inc. (NYSE:ACB), which was worth $64.3 million at the end of the first quarter. On the second spot was Peconic Partners LLC which amassed $22.4 million worth of shares. Moreover, Citadel Investment Group, Citadel Investment Group, and Renaissance Technologies were also bullish on Aurora Cannabis Inc. (NYSE:ACB), allocating a large percentage of their portfolios to this stock.
As industrywide interest jumped, specific money managers have jumped into Aurora Cannabis Inc. (NYSE:ACB) headfirst. Peconic Partners LLC, managed by William Harnisch, created the most valuable position in Aurora Cannabis Inc. (NYSE:ACB). Peconic Partners LLC had $22.4 million invested in the company at the end of the quarter. Jim Simons’s Renaissance Technologies also made a $7.1 million investment in the stock during the quarter. The following funds were also among the new ACB investors: Kenneth Tropin’s Graham Capital Management, Matthew Hulsizer’s PEAK6 Capital Management, and Nick Niell’s Arrowgrass Capital Partners.
Let’s now review hedge fund activity in other stocks similar to Aurora Cannabis Inc. (NYSE:ACB). We will take a look at EPAM Systems Inc (NYSE:EPAM), Bio-Rad Laboratories, Inc. (NYSE:BIO), Mohawk Industries, Inc. (NYSE:MHK), and CF Industries Holdings, Inc. (NYSE:CF). All of these stocks’ market caps match ACB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| EPAM | 21 | 72308 | -1 |
| BIO | 37 | 888698 | 2 |
| MHK | 34 | 1887240 | 2 |
| CF | 32 | 763506 | -10 |
| Average | 31 | 902938 | -1.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 31 hedge funds with bullish positions and the average amount invested in these stocks was $903 million. That figure was $116 million in ACB’s case. Bio-Rad Laboratories, Inc. (NYSE:BIO) is the most popular stock in this table. On the other hand EPAM Systems Inc (NYSE:EPAM) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks Aurora Cannabis Inc. (NYSE:ACB) is even less popular than EPAM. Hedge funds dodged a bullet by taking a bearish stance towards ACB. Our calculations showed that the top 20 most popular hedge fund stocks returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately ACB wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); ACB investors were disappointed as the stock returned -17.4% during the same time frame and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in the second quarter.
Disclosure: None. This article was originally published at Insider Monkey.
