Hedge funds and other investment firms run by legendary investors like Israel Englander and Ray Dalio are entrusted to manage billions of dollars of accredited investors’ money because they are without peer in the resources they use to identify the best investments for their chosen investment horizon. Moreover, they are more willing to invest a greater amount of their resources in small-cap stocks than big brokerage houses, and this is often where they generate their outperformance, which is why we pay particular attention to their best ideas in this space.
In this article, we are going to take a closer look at Adverum Biotechnologies Inc (NASDAQ:ADVM), in which 11 funds held shares at the end of September. Overall, among the funds tracked by us, ADVM registered a decline in popularity during the third quarter. At the end of this article we will also compare ADVM to other stocks including Ocular Therapeutix Inc (NASDAQ:OCUL), Avenue Income Credit Strategies Fund (NYSE:ACP), and Pacific Mercantile Bancorp (NASDAQ:PMBC) to get a better sense of its popularity.
Follow Adverum Biotechnologies Inc. (NASDAQ:ADVM)
Follow Adverum Biotechnologies Inc. (NASDAQ:ADVM)
We follow over 700 hedge funds and other institutional investors and by analyzing their quarterly 13F filings, we identify stocks that they are collectively bullish on and develop investment strategies based on this data. One strategy that outperformed the market over the last year involves selecting the 100 best-performing funds and identifying the 30 mid-cap stocks that they are collectively most bullish on. Over the past year, this strategy generated returns of 18%, topping the 8% gain registered by S&P 500 ETFs. We launched this strategy 2.5 years ago and it returned more than 39% since then, vs. 22% gain registered by the S&P 500 ETFs.
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With all of this in mind, we’re going to check out the key action encompassing Adverum Biotechnologies Inc (NASDAQ:ADVM).
What have hedge funds been doing with Adverum Biotechnologies Inc (NASDAQ:ADVM)?
At Q3’s end, a total of 11 of the hedge funds tracked by Insider Monkey were bullish on this stock, down by 27% from one quarter earlier. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Anders Hove and Bong Koh’s VHCP Management has the most valuable position in Adverum Biotechnologies Inc (NASDAQ:ADVM), worth close to $4.5 million, accounting for 4.5% of its total 13F portfolio. On VHCP Management’s heels is Renaissance Technologies, one of the largest hedge funds in the world, holding a $4.1 million position; less than 0.1%% of its 13F portfolio is allocated to the company. Other professional money managers with similar optimism comprise Oleg Nodelman’s EcoR1 Capital, Hal Mintz’s Sabby Capital, and Chuck Royce’s Royce & Associates. 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.
Now that we’ve mentioned the most bullish investors, let’s also take a look at some funds that said goodbye to their entire stakes in the stock during the third quarter. At the top of the heap, Jeffrey Jay and David Kroin’s Great Point Partners said goodbye to the largest position of the 700 funds followed by Insider Monkey, worth close to $1.7 million in stock, and Nathan Fischel’s DAFNA Capital Management was right behind this move, as the fund cut about $0.4 million worth of shares.
Let’s now review hedge fund activity in other stocks – not necessarily in the same industry as Adverum Biotechnologies Inc (NASDAQ:ADVM) but similarly valued. We will take a look at Ocular Therapeutix Inc (NASDAQ:OCUL), Avenue Income Credit Strategies Fund (NYSE:ACP), Pacific Mercantile Bancorp (NASDAQ:PMBC), and CyberOptics Corporation (NASDAQ:CYBE). All of these stocks’ market caps are closest to ADVM’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| OCUL | 6 | 6414 | -5 |
| ACP | 4 | 6629 | 1 |
| PMBC | 2 | 10176 | 0 |
| CYBE | 5 | 12463 | 5 |
As you can see these stocks had an average of four hedge funds with bullish positions and the average amount invested in these stocks was $9 million. That figure was $15 million in ADVM’s case. Ocular Therapeutix Inc (NASDAQ:OCUL) is the most popular stock in this table. On the other hand Pacific Mercantile Bancorp (NASDAQ:PMBC) is the least popular one with only two bullish hedge fund positions. Compared to these stocks Adverum Biotechnologies Inc (NASDAQ:ADVM) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, it may be a good idea to analyze it in detail and potentially include it in your portfolio.
Disclosure: none