Insider Monkey has processed numerous 13F filings of hedge funds and famous investors to create an extensive database of hedge fund holdings. The 13F filings show the hedge funds’ and investors’ positions as of the end of the fourth quarter. You can find write-ups about an individual hedge fund’s trades on numerous financial news websites. However, in this article we will take a look at their collective moves and analyze what the smart money thinks of Sangamo Therapeutics, Inc. (NASDAQ:SGMO) based on that data.
Sangamo Therapeutics, Inc. (NASDAQ:SGMO) shareholders have witnessed a decrease in hedge fund interest of late. Our calculations also showed that sgmo isn’t among the 30 most popular stocks among hedge funds.
So, why do we pay attention to hedge fund sentiment before making any investment decisions? 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 market by 32 percentage points since May 2014 through March 12, 2019 (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. Even if you aren’t comfortable with shorting stocks, you should at least avoid initiating long positions in our short portfolio.
We’re going to check out the recent hedge fund action encompassing Sangamo Therapeutics, Inc. (NASDAQ:SGMO).
What have hedge funds been doing with Sangamo Therapeutics, Inc. (NASDAQ:SGMO)?
At the end of the fourth quarter, a total of 23 of the hedge funds tracked by Insider Monkey were long this stock, a change of -12% from one quarter earlier. On the other hand, there were a total of 21 hedge funds with a bullish position in SGMO a year ago. With hedgies’ sentiment swirling, there exists an “upper tier” of key hedge fund managers who were increasing their stakes meaningfully (or already accumulated large positions).
According to Insider Monkey’s hedge fund database, EcoR1 Capital, managed by Oleg Nodelman, holds the most valuable position in Sangamo Therapeutics, Inc. (NASDAQ:SGMO). EcoR1 Capital has a $13.6 million position in the stock, comprising 1.4% of its 13F portfolio. Sitting at the No. 2 spot is Eli Casdin of Casdin Capital, with a $12.4 million position; the fund has 2.1% of its 13F portfolio invested in the stock. Other hedge funds and institutional investors that are bullish consist of Julian Baker and Felix Baker’s Baker Bros. Advisors, Phill Gross and Robert Atchinson’s Adage Capital Management and Paul Marshall and Ian Wace’s Marshall Wace LLP.
Due to the fact that Sangamo Therapeutics, Inc. (NASDAQ:SGMO) has faced a decline in interest from hedge fund managers, it’s easy to see that there exists a select few hedge funds that decided to sell off their positions entirely in the third quarter. Intriguingly, Israel Englander’s Millennium Management dropped the biggest stake of the “upper crust” of funds followed by Insider Monkey, worth about $7.9 million in stock, and Jim Tananbaum’s Foresite Capital was right behind this move, as the fund dumped about $4.5 million worth. These bearish behaviors are intriguing to say the least, as aggregate hedge fund interest dropped by 3 funds in the third quarter.
Let’s also examine hedge fund activity in other stocks – not necessarily in the same industry as Sangamo Therapeutics, Inc. (NASDAQ:SGMO) but similarly valued. We will take a look at Frank’s International N.V. (NYSE:FI), PROS Holdings, Inc. (NYSE:PRO), TiVo Corporation (NASDAQ:TIVO), and 3D Systems Corporation (NYSE:DDD). This group of stocks’ market caps are closest to SGMO’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| FI | 12 | 24473 | 1 |
| PRO | 15 | 111619 | -1 |
| TIVO | 19 | 90952 | 1 |
| DDD | 11 | 50546 | -3 |
| Average | 14.25 | 69398 | -0.5 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 14.25 hedge funds with bullish positions and the average amount invested in these stocks was $69 million. That figure was $80 million in SGMO’s case. TiVo Corporation (NASDAQ:TIVO) is the most popular stock in this table. On the other hand 3D Systems Corporation (NYSE:DDD) is the least popular one with only 11 bullish hedge fund positions. Compared to these stocks Sangamo Therapeutics, Inc. (NASDAQ:SGMO) is more popular among hedge funds. Our calculations showed that top 15 most popular stocks) among hedge funds returned 24.2% through April 22nd and outperformed the S&P 500 ETF (SPY) by more than 7 percentage points. Unfortunately SGMO wasn’t nearly as popular as these 15 stock and hedge funds that were betting on SGMO were disappointed as the stock returned 2.5% and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 15 most popular stocks) among hedge funds as 13 of these stocks already outperformed the market this year.
Disclosure: None. This article was originally published at Insider Monkey.
