We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds’ and investors’ portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think of iBio, Inc. (NYSE:IBIO) based on that data.
Is iBio, Inc. (NYSE:IBIO) an attractive investment today? Money managers are getting more optimistic. The number of bullish hedge fund bets increased by 1 in recent months. Our calculations also showed that IBIO 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.
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 S&P 500 ETFs by 44 percentage points since March 2017 (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.
Israel Englander of Millennium Management
At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, legendary investor Bill Miller told investors to sell 7 extremely popular recession stocks last month. So, we went through his list and recommended another stock with 100% upside potential instead. We interview hedge fund managers and ask them about their best ideas. You can watch our latest hedge fund manager interview here and find out the name of the large-cap healthcare stock that Sio Capital’s Michael Castor expects to double. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. Our best call in 2020 was shorting the market when S&P 500 was trading at 3150 after realizing the coronavirus pandemic’s significance before most investors. Keeping this in mind we’re going to take a look at the latest hedge fund action encompassing iBio, Inc. (NYSE:IBIO).
What does smart money think about iBio, Inc. (NYSE:IBIO)?
Heading into the second quarter of 2020, a total of 3 of the hedge funds tracked by Insider Monkey were long this stock, a change of 50% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in IBIO over the last 18 quarters. So, let’s check out which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Millennium Management was the largest shareholder of iBio, Inc. (NYSE:IBIO), with a stake worth $0.1 million reported as of the end of September. Trailing Millennium Management was ExodusPoint Capital, which amassed a stake valued at $0 million. Renaissance Technologies was also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position ExodusPoint Capital allocated the biggest weight to iBio, Inc. (NYSE:IBIO), around 0.0023% of its 13F portfolio. Millennium Management is also relatively very bullish on the stock, earmarking 0.0002 percent of its 13F equity portfolio to IBIO.
As one would reasonably expect, key money managers have jumped into iBio, Inc. (NYSE:IBIO) headfirst. Millennium Management, managed by Israel Englander, assembled the most valuable position in iBio, Inc. (NYSE:IBIO). Millennium Management had $0.1 million invested in the company at the end of the quarter.Renaissance Technologies also made a $0 million investment in the stock during the quarter.
Let’s check out hedge fund activity in other stocks similar to iBio, Inc. (NYSE:IBIO). These stocks are Mesa Air Group, Inc. (NASDAQ:MESA), United Security Bancshares (NASDAQ:UBFO), Castlight Health Inc (NYSE:CSLT), and Savara, Inc. (NASDAQ:SVRA). This group of stocks’ market caps resemble IBIO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MESA | 10 | 25375 | -4 |
| UBFO | 3 | 1992 | -2 |
| CSLT | 13 | 18972 | -4 |
| SVRA | 11 | 20457 | -3 |
| Average | 9.25 | 16699 | -3.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.25 hedge funds with bullish positions and the average amount invested in these stocks was $17 million. That figure was $0 million in IBIO’s case. Castlight Health Inc (NYSE:CSLT) is the most popular stock in this table. On the other hand United Security Bancshares (NASDAQ:UBFO) is the least popular one with only 3 bullish hedge fund positions. Compared to these stocks iBio, Inc. (NYSE:IBIO) is even less popular than UBFO. Hedge funds clearly dropped the ball on IBIO as the stock delivered strong returns, though hedge funds’ consensus picks still generated respectable returns. 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 7.9% in 2020 through May 22nd and still beat the market by 15.6 percentage points. A small number of hedge funds were also right about betting on IBIO as the stock returned 42.5% so far in the second quarter and outperformed the market by an even larger margin.
Disclosure: None. This article was originally published at Insider Monkey.