Is Twist Bioscience Corporation (NASDAQ:TWST) a good place to invest some of your money right now? We can gain invaluable insight to help us answer that question by studying the investment trends of top investors, who employ world-class Ivy League graduates, who are given immense resources and industry contacts to put their financial expertise to work. The top picks of these firms have historically outperformed the market when we account for known risk factors, making them very valuable investment ideas.
Is Twist Bioscience Corporation (NASDAQ:TWST) the right investment to pursue these days? Prominent investors are taking a bullish view. The number of bullish hedge fund bets inched up by 6 lately. Our calculations also showed that TWST isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In today’s marketplace there are a large number of formulas stock market investors have at their disposal to size up their stock investments. A duo of the best formulas are hedge fund and insider trading sentiment. We have shown that, historically, those who follow the top picks of the best investment managers can outclass the market by a superb amount (see the details here).
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a glance at the new hedge fund action surrounding Twist Bioscience Corporation (NASDAQ:TWST).
What does smart money think about Twist Bioscience Corporation (NASDAQ:TWST)?
At the end of the second quarter, a total of 9 of the hedge funds tracked by Insider Monkey were long this stock, a change of 200% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in TWST over the last 16 quarters. With the smart money’s capital changing hands, there exists a few key hedge fund managers who were adding to their stakes significantly (or already accumulated large positions).
More specifically, Cormorant Asset Management was the largest shareholder of Twist Bioscience Corporation (NASDAQ:TWST), with a stake worth $20.5 million reported as of the end of March. Trailing Cormorant Asset Management was Millennium Management, which amassed a stake valued at $18 million. Driehaus Capital, Farallon Capital, and Casdin Capital were also very fond of the stock, giving the stock large weights in their portfolios.
Now, key money managers were leading the bulls’ herd. Millennium Management, managed by Israel Englander, created the largest position in Twist Bioscience Corporation (NASDAQ:TWST). Millennium Management had $18 million invested in the company at the end of the quarter. Farallon Capital also initiated a $8.9 million position during the quarter. The other funds with brand new TWST positions are Eli Casdin’s Casdin Capital, Joseph Edelman’s Perceptive Advisors, and Renaissance Technologies.
Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Twist Bioscience Corporation (NASDAQ:TWST) but similarly valued. These stocks are Coeur Mining, Inc. (NYSE:CDE), Valhi, Inc. (NYSE:VHI), ATN International, Inc. (NASDAQ:ATNI), and U.S. Silica Holdings Inc (NYSE:SLCA). All of these stocks’ market caps resemble TWST’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CDE | 10 | 29389 | -1 |
| VHI | 6 | 8001 | 0 |
| ATNI | 9 | 61868 | -1 |
| SLCA | 17 | 281845 | 3 |
| Average | 10.5 | 95276 | 0.25 |
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 $95 million. That figure was $70 million in TWST’s case. U.S. Silica Holdings Inc (NYSE:SLCA) is the most popular stock in this table. On the other hand Valhi, Inc. (NYSE:VHI) is the least popular one with only 6 bullish hedge fund positions. Twist Bioscience Corporation (NASDAQ:TWST) 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 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately TWST wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was quite bearish); TWST investors were disappointed as the stock returned -17.7% during the third quarter 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 many of these stocks already outperformed the market so far in 2019.
Disclosure: None. This article was originally published at Insider Monkey.