Hedge Funds and other institutional investors have just completed filing their 13Fs with the Securities and Exchange Commission, revealing their equity portfolios as of the end of June. At Insider Monkey, we follow nearly 750 active hedge funds and notable investors and by analyzing their 13F filings, we can determine the stocks that they are collectively bullish on. One of their picks is Synlogic, Inc. (NASDAQ:SYBX), so let’s take a closer look at the sentiment that surrounds it in the current quarter.
Synlogic, Inc. (NASDAQ:SYBX) shares haven’t seen a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 6 hedge funds’ portfolios at the end of the third quarter of 2019. 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 Big Rock Partners Acquisition Corp. (NASDAQ:BRPA), Otonomy Inc (NASDAQ:OTIC), and Tuesday Morning Corporation (NASDAQ:TUES) to gather more data points. Our calculations also showed that SYBX isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video below for Q2 rankings).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
In the 21st century investor’s toolkit there are many metrics investors use to analyze their holdings. Some of the most useful metrics are hedge fund and insider trading sentiment. Our researchers have shown that, historically, those who follow the best picks of the top investment managers can outclass the S&P 500 by a superb amount (see the details here).
Samuel Isaly of OrbiMed Advisors
We leave no stone unturned when looking for the next great investment idea. For example Discover is offering this insane cashback card, so we look into shorting the stock. One of the most bullish analysts in America just put his money where his mouth is. He says, “I’m investing more today than I did back in early 2009.” So we check out his pitch. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. We even check out this option genius’ weekly trade ideas. This December, we recommended Adams Energy as a one-way bet based on an under-the-radar fund manager’s investor letter and the stock already gained 20 percent. With all of this in mind let’s check out the fresh hedge fund action surrounding Synlogic, Inc. (NASDAQ:SYBX).
What have hedge funds been doing with Synlogic, Inc. (NASDAQ:SYBX)?
At the end of the third quarter, a total of 6 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 0% from the previous quarter. The graph below displays the number of hedge funds with bullish position in SYBX over the last 17 quarters. With the smart money’s sentiment swirling, there exists a few noteworthy hedge fund managers who were boosting their holdings substantially (or already accumulated large positions).
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, OrbiMed Advisors, managed by Samuel Isaly, holds the most valuable position in Synlogic, Inc. (NASDAQ:SYBX). OrbiMed Advisors has a $4.6 million position in the stock, comprising 0.1% of its 13F portfolio. On OrbiMed Advisors’s heels is James E. Flynn of Deerfield Management, with a $2.5 million position; 0.1% of its 13F portfolio is allocated to the company. Some other peers with similar optimism consist of Nathan Fischel’s DAFNA Capital Management, Alan Frazier’s Frazier Healthcare Partners and Renaissance Technologies. In terms of the portfolio weights assigned to each position DAFNA Capital Management allocated the biggest weight to Synlogic, Inc. (NASDAQ:SYBX), around 0.37% of its 13F portfolio. Frazier Healthcare Partners is also relatively very bullish on the stock, setting aside 0.2 percent of its 13F equity portfolio to SYBX.
Since Synlogic, Inc. (NASDAQ:SYBX) has witnessed bearish sentiment from the smart money, logic holds that there exists a select few money managers that decided to sell off their full holdings by the end of the third quarter. It’s worth mentioning that Marc Schneidman’s Aquilo Capital Management cut the biggest position of the “upper crust” of funds watched by Insider Monkey, comprising close to $9.5 million in stock, and Joseph Edelman’s Perceptive Advisors was right behind this move, as the fund sold off about $7.9 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest stayed the same (this is a bearish signal in our experience).
Let’s go over hedge fund activity in other stocks similar to Synlogic, Inc. (NASDAQ:SYBX). We will take a look at Big Rock Partners Acquisition Corp. (NASDAQ:BRPA), Otonomy Inc (NASDAQ:OTIC), Tuesday Morning Corporation (NASDAQ:TUES), and Superior Industries International Inc. (NYSE:SUP). This group of stocks’ market caps resemble SYBX’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| BRPA | 7 | 8819 | 2 |
| OTIC | 8 | 12372 | -1 |
| TUES | 12 | 5356 | 3 |
| SUP | 16 | 13920 | 1 |
| Average | 10.75 | 10117 | 1.25 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 10.75 hedge funds with bullish positions and the average amount invested in these stocks was $10 million. That figure was $9 million in SYBX’s case. Superior Industries International Inc. (NYSE:SUP) is the most popular stock in this table. On the other hand Big Rock Partners Acquisition Corp. (NASDAQ:BRPA) is the least popular one with only 7 bullish hedge fund positions. Compared to these stocks Synlogic, Inc. (NASDAQ:SYBX) is even less popular than BRPA. Hedge funds dodged a bullet by taking a bearish stance towards SYBX. Our calculations showed that the top 20 most popular hedge fund stocks returned 37.4% in 2019 through the end of November and outperformed the S&P 500 ETF (SPY) by 9.9 percentage points. Unfortunately SYBX wasn’t nearly as popular as these 20 stocks (hedge fund sentiment was very bearish); SYBX investors were disappointed as the stock returned -6.6% during the fourth quarter (through the end of November) 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 70 percent of these stocks already outperformed the market so far in Q4.
Disclosure: None. This article was originally published at Insider Monkey.
