Here is What Hedge Funds Think About Seres Therapeutics Inc (MCRB)

While the market is being driven by short-term sentiment influenced by uncertainty regarding the future of the interest rate environment in the U.S, the low commodity prices, and the economic dip in China, many smart money investors are keeping their optimism regarding the current bull run, while nonetheless hedging many of their long positions. However, as we know, big investors usually buy stocks with strong fundamentals, which is why we believe we can profit from imitating them. In this article, we are going to take a look at the smart money sentiment surrounding Seres Therapeutics Inc (NASDAQ:MCRB).

Seres Therapeutics Inc (NASDAQ:MCRB) was in 10 hedge funds’ portfolios at the end of the third quarter of 2015. Seres Therapeutics Inc investors should pay attention to a decrease in hedge fund interest lately. There were 13 hedge funds in our database with Seres Therapeutics Inc holdings at the end of the previous quarter. The level and the change in hedge fund popularity aren’t the only variables you need to analyze to decipher hedge funds’ perspectives. A stock may witness a boost in popularity but it may still be less popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as NuStar GP Holdings, LLC (NYSE:NSH), SPS Commerce, Inc. (NASDAQ:SPSC), and Texas Pacific Land Trust (NYSE:TPL) to gather more data points.

In the 21st century investor’s toolkit there are many gauges stock traders put to use to evaluate publicly traded companies. A couple of the best gauges are hedge fund and insider trading indicators. Our experts have shown that, historically, those who follow the top picks of the top fund managers can trounce their index-focused peers by a significant amount (see the details here).

Keeping this in mind, we’re going to view the new action regarding Seres Therapeutics Inc (NASDAQ:MCRB).

Hedge fund activity in Seres Therapeutics Inc (NASDAQ:MCRB)

At Q3’s end, a total of 10 of the hedge funds tracked by Insider Monkey held long positions in this stock, a 23% fall from the second quarter. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings meaningfully (or already accumulated large positions).

Of the funds tracked by Insider Monkey, Bihua Chen’s Cormorant Asset Management has the biggest position in Seres Therapeutics Inc (NASDAQ:MCRB), worth close to $7.4 million, accounting for 1.2% of its total 13F portfolio. The second-most bullish fund manager is Samuel Isaly of OrbiMed Advisors, with a $7.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Remaining hedge funds and institutional investors that hold long positions comprise Peter Kolchinsky’s RA Capital Management, Roberto Mignone’s Bridger Management, and Kris Jenner, Gordon Bussard, and Graham McPhail’s Rock Springs Capital Management.

Judging by the fact that Seres Therapeutics Inc (NASDAQ:MCRB) has faced a declination in interest from the entirety of the hedge funds we track, we can see that there exists a select few hedge funds that decided to sell off their full holdings in the third quarter. At the top of the heap, Ken Griffin’s Citadel Investment Group dropped the biggest position of the 700 funds watched by Insider Monkey, worth about $8 million in stock, and Joseph Edelman’s Perceptive Advisors was right behind this move, as the fund dropped about $2.1 million worth of shares. These moves are intriguing to say the least, as total hedge fund interest fell by 3 funds in the third quarter.

Let’s now take a look at hedge fund activity in other stocks – not necessarily in the same industry as Seres Therapeutics Inc (NASDAQ:MCRB) but similarly valued. We will take a look at NuStar GP Holdings, LLC (NYSE:NSH), SPS Commerce, Inc. (NASDAQ:SPSC), Texas Pacific Land Trust (NYSE:TPL), and Depomed Inc (NASDAQ:DEPO). All of these stocks’ market caps are similar to Seres Therapeutics Inc’s market cap.

As you can see these stocks had an average of 13.25 hedge funds with bullish positions and the average amount invested in these stocks was $149 million. That figure was $43 million in Seres Therapeutics Inc’s case. Depomed Inc (NASDAQ:DEPO) is the most popular stock in this table. On the other hand Texas Pacific Land Trust (NYSE:TPL) is the least popular one with only 5 bullish hedge fund positions. Seres Therapeutics Inc (NASDAQ:MCRB) 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 Depomed Inc might be a better candidate to consider a long position.