Is Adaptive Biotechnologies Corporation (NASDAQ:ADPT) 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 ADPT a good stock to buy? Adaptive Biotechnologies Corporation (NASDAQ:ADPT) investors should pay attention to a decrease in support from the world’s most elite money managers in recent months. Adaptive Biotechnologies Corporation (NASDAQ:ADPT) was in 29 hedge funds’ portfolios at the end of the first quarter of 2021. The all time high for this statistic is 38. There were 30 hedge funds in our database with ADPT holdings at the end of December. Our calculations also showed that ADPT isn’t among the 30 most popular stocks among hedge funds (click for Q1 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 115 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium mining is one of the fastest growing industries right now, so we are checking out stock pitches like this emerging lithium stock. We go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free daily newsletter on our homepage. Keeping this in mind we’re going to view the fresh hedge fund action encompassing Adaptive Biotechnologies Corporation (NASDAQ:ADPT).
Do Hedge Funds Think ADPT Is A Good Stock To Buy Now?
Heading into the second quarter of 2021, a total of 29 of the hedge funds tracked by Insider Monkey were long this stock, a change of -3% from the previous quarter. On the other hand, there were a total of 18 hedge funds with a bullish position in ADPT a year ago. With hedgies’ positions undergoing their usual ebb and flow, there exists a select group of key hedge fund managers who were increasing their holdings significantly (or already accumulated large positions).
More specifically, Viking Global was the largest shareholder of Adaptive Biotechnologies Corporation (NASDAQ:ADPT), with a stake worth $1207.5 million reported as of the end of March. Trailing Viking Global was Matrix Capital Management, which amassed a stake valued at $495.6 million. ARK Investment Management, Casdin Capital, and Tiger Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Tiger Management allocated the biggest weight to Adaptive Biotechnologies Corporation (NASDAQ:ADPT), around 8.83% of its 13F portfolio. Matrix Capital Management is also relatively very bullish on the stock, dishing out 5.72 percent of its 13F equity portfolio to ADPT.
Judging by the fact that Adaptive Biotechnologies Corporation (NASDAQ:ADPT) has faced falling interest from the entirety of the hedge funds we track, it’s easy to see that there exists a select few fund managers who sold off their full holdings heading into Q2. At the top of the heap, Julian Baker and Felix Baker’s Baker Bros. Advisors cut the largest position of all the hedgies tracked by Insider Monkey, comprising an estimated $22.5 million in stock. Frank Fu’s fund, CaaS Capital, also dropped its stock, about $10.7 million worth. These moves are interesting, as aggregate hedge fund interest was cut by 1 funds heading into Q2.
Let’s go over hedge fund activity in other stocks similar to Adaptive Biotechnologies Corporation (NASDAQ:ADPT). These stocks are Upwork Inc. (NASDAQ:UPWK), GrubHub Inc (NYSE:GRUB), Air Lease Corp (NYSE:AL), Omnicell, Inc. (NASDAQ:OMCL), South State Corporation (NASDAQ:SSB), Valley National Bancorp (NYSE:VLY), and Q2 Holdings Inc (NYSE:QTWO). This group of stocks’ market caps are closest to ADPT’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| UPWK | 32 | 530996 | -2 |
| GRUB | 35 | 1075678 | -3 |
| AL | 27 | 917435 | 3 |
| OMCL | 19 | 73328 | -1 |
| SSB | 24 | 252240 | 7 |
| VLY | 17 | 87726 | 0 |
| QTWO | 26 | 248123 | 3 |
| Average | 25.7 | 455075 | 1 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 25.7 hedge funds with bullish positions and the average amount invested in these stocks was $455 million. That figure was $2139 million in ADPT’s case. GrubHub Inc (NYSE:GRUB) is the most popular stock in this table. On the other hand Valley National Bancorp (NYSE:VLY) is the least popular one with only 17 bullish hedge fund positions. Adaptive Biotechnologies Corporation (NASDAQ:ADPT) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ADPT is 60.2. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 22.8% in 2021 through July 2nd and beat the market again by 6 percentage points. Unfortunately ADPT wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on ADPT were disappointed as the stock returned -2.4% since the end of March (through 7/2) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
Follow Adaptive Biotechnologies Corp (NASDAQ:ADPT)
Follow Adaptive Biotechnologies Corp (NASDAQ:ADPT)
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Disclosure: None. This article was originally published at Insider Monkey.
