Insider Monkey has processed numerous 13F filings of hedge funds and successful investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and successful investors’ positions as of the end of the first quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of Genfit SA (NASDAQ:GNFT) based on that data.
Genfit SA (NASDAQ:GNFT) was in 10 hedge funds’ portfolios at the end of the first quarter of 2019. GNFT investors should pay attention to an increase in enthusiasm from smart money lately. There were 0 hedge funds in our database with GNFT positions at the end of the previous quarter. Our calculations also showed that GNFT isn’t among the 30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
Let’s check out the new hedge fund action regarding Genfit SA (NASDAQ:GNFT).
What have hedge funds been doing with Genfit SA (NASDAQ:GNFT)?
At Q1’s end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 10 from one quarter earlier. On the other hand, there were a total of 0 hedge funds with a bullish position in GNFT a year ago. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Genfit SA (NASDAQ:GNFT) was held by OrbiMed Advisors, which reported holding $29.5 million worth of stock at the end of March. It was followed by Great Point Partners with a $29.5 million position. Other investors bullish on the company included Cormorant Asset Management, Healthcor Management LP, and GLG Partners.
Consequently, key money managers were leading the bulls’ herd. OrbiMed Advisors, managed by Samuel Isaly, initiated the most outsized position in Genfit SA (NASDAQ:GNFT). OrbiMed Advisors had $29.5 million invested in the company at the end of the quarter. Jeffrey Jay and David Kroin’s Great Point Partners also made a $29.5 million investment in the stock during the quarter. The following funds were also among the new GNFT investors: Bihua Chen’s Cormorant Asset Management, Arthur B Cohen and Joseph Healey’s Healthcor Management LP, and Noam Gottesman’s GLG Partners.
Let’s go over hedge fund activity in other stocks similar to Genfit SA (NASDAQ:GNFT). These stocks are InfraREIT, Inc. (REIT) (NYSE:HIFR), ScanSource, Inc. (NASDAQ:SCSC), SunPower Corporation (NASDAQ:SPWR), and Middlesex Water Company (NASDAQ:MSEX). This group of stocks’ market values match GNFT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| HIFR | 14 | 190869 | -1 |
| SCSC | 10 | 49992 | -2 |
| SPWR | 9 | 36580 | 1 |
| MSEX | 9 | 48181 | -2 |
| Average | 10.5 | 81406 | -1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.5 hedge funds with bullish positions and the average amount invested in these stocks was $81 million. That figure was $91 million in GNFT’s case. InfraREIT Inc (NYSE:HIFR) is the most popular stock in this table. On the other hand SunPower Corporation (NASDAQ:SPWR) is the least popular one with only 9 bullish hedge fund positions. Genfit SA (NASDAQ:GNFT) is not the least popular stock in this group but hedge fund interest is still below average. This is a slightly negative signal and we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 6.2% in Q2 through June 19th and outperformed the S&P 500 ETF (SPY) by nearly 3 percentage points. Unfortunately GNFT wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); GNFT investors were disappointed as the stock returned -14.8% 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 20 most popular stocks among hedge funds as 13 of these stocks already outperformed the market so far in Q2.
Disclosure: None. This article was originally published at Insider Monkey.