You probably know from experience that there is not as much information on small-cap companies as there is on large companies. Of course, this makes it really hard and difficult for individual investors to make proper and accurate analysis of certain small-cap companies. However, well-known and successful hedge fund investors like Carl Icahn and George Soros hold the necessary resources and abilities to conduct an extensive stock analysis on small-cap stocks, which enable them to make millions of dollars by identifying potential winners within the small-cap galaxy of stocks. This represents the main reason why Insider Monkey takes notice of the hedge fund activity in these overlooked stocks.
Editas Medicine Inc (NASDAQ:EDIT) investors should be aware of an increase in hedge fund interest recently. EDIT was in 10 hedge funds’ portfolios at the end of the third quarter of 2016. There were 6 hedge funds in our database with EDIT holdings at the end of the previous quarter. At the end of this article we will also compare EDIT to other stocks including Live Oak Bancshares Inc (NASDAQ:LOB), Bristow Group Inc (NYSE:BRS), and Preferred Bank (NASDAQ:PFBC) to get a better sense of its popularity.
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What have hedge funds been doing with Editas Medicine Inc (NASDAQ:EDIT)?
At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, up by 67% from one quarter earlier. The graph below displays the number of hedge funds with bullish position in EDIT over the last 5 quarters. With hedge funds’ sentiment swirling, there exists a select group of notable hedge fund managers who were boosting their stakes considerably (or already accumulated large positions).
When looking at the institutional investors followed by Insider Monkey, Andreas Halvorsen of Viking Global holds the biggest position in Editas Medicine Inc (NASDAQ:EDIT) which has a $23 million position in the stock. On Viking Global’s heels is James E. Flynn’s Deerfield Management holding a $23 million position; the fund has 1.1% of its 13F portfolio invested in the stock. Some other hedge funds and institutional investors that are bullish include Hal Mintz’s Sabby Capital, Jim Simons’ Renaissance Technologies, one of the largest hedge funds in the world, and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital. We should note that none of these hedge funds are among our list of the 100 best performing hedge funds which is based on the performance of their 13F long positions in non-microcap stocks.
As aggregate interest increased, key money managers were breaking ground themselves. Sabby Capital initiated the most valuable position in Editas Medicine Inc (NASDAQ:EDIT) which had $1.8 million invested in the company at the end of the quarter. Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital also made a $1.2 million investment in the stock during the quarter. The other funds with new positions in the stock are Eli Casdin’s Casdin Capital, Dmitry Balyasny’s Balyasny Asset Management, and Mike Vranos’ Ellington.
Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Editas Medicine Inc (NASDAQ:EDIT) but similarly valued. We will take a look at Live Oak Bancshares Inc (NASDAQ:LOB), Bristow Group Inc (NYSE:BRS), Preferred Bank (NASDAQ:PFBC), and Minerva Neurosciences Inc (NASDAQ:NERV). This group of stocks’ market values are closest to EDIT’s market value.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| LOB | 4 | 7326 | -2 |
| BRS | 16 | 244657 | 3 |
| PFBC | 9 | 50330 | 0 |
| NERV | 11 | 105736 | -5 |
As you can see these stocks had an average of 10 hedge funds with bullish positions and the average amount invested in these stocks was $102 million. That figure was $54 million in EDIT’s case. Bristow Group Inc (NYSE:BRS) is the most popular stock in this table. On the other hand Live Oak Bancshares Inc (NASDAQ:LOB) is the least popular one with only 4 bullish hedge fund positions. Editas Medicine Inc (NASDAQ:EDIT) 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. In this regard BRS might be a better candidate to consider taking a long position in.
Disclosure: None
