The latest 13F reporting period has come and gone, and Insider Monkey have plowed through 823 13F filings that hedge funds and well-known value investors are required to file by the SEC. The 13F filings show the funds’ and investors’ portfolio positions as of June 30th, when the S&P 500 Index was trading around the 3100 level. Since the end of March, investors decided to bet on the economic recovery and a stock market rebound. S&P 500 Index returned more than 50% since its bottom. In this article you are going to find out whether hedge funds thought Assembly Biosciences Inc (NASDAQ:ASMB) was a good investment heading into the third quarter and how the stock traded in comparison to the top hedge fund picks.
Is Assembly Biosciences Inc (NASDAQ:ASMB) a buy right now? The smart money was becoming more confident. The number of bullish hedge fund bets improved by 1 recently. Assembly Biosciences Inc (NASDAQ:ASMB) was in 19 hedge funds’ portfolios at the end of June. The all time high for this statistics is 21. Our calculations also showed that ASMB isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings and see the video for a quick look at the top 5 stocks). There were 18 hedge funds in our database with ASMB positions at the end of the first quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
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. 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 56 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that’ll significantly underperform the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 34% through August 17th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to.
Kris Jenner of Rock Springs Capital Management
At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we are checking out this junior gold mining stock and we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. 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 website to get excerpts of these letters in your inbox. Now we’re going to view the new hedge fund action surrounding Assembly Biosciences Inc (NASDAQ:ASMB).
How are hedge funds trading Assembly Biosciences Inc (NASDAQ:ASMB)?
Heading into the third quarter of 2020, a total of 19 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of 6% from one quarter earlier. By comparison, 18 hedge funds held shares or bullish call options in ASMB a year ago. With the smart money’s sentiment swirling, there exists a few notable hedge fund managers who were upping their stakes meaningfully (or already accumulated large positions).
Of the funds tracked by Insider Monkey, Consonance Capital Management, managed by Mitchell Blutt, holds the number one position in Assembly Biosciences Inc (NASDAQ:ASMB). Consonance Capital Management has a $74.1 million position in the stock, comprising 4.4% of its 13F portfolio. The second most bullish fund manager is Oleg Nodelman of EcoR1 Capital, with a $73.5 million position; 5.4% of its 13F portfolio is allocated to the stock. Other professional money managers that hold long positions contain Julian Baker and Felix Baker’s Baker Bros. Advisors, Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management and Ken Griffin’s Citadel Investment Group. In terms of the portfolio weights assigned to each position EcoR1 Capital allocated the biggest weight to Assembly Biosciences Inc (NASDAQ:ASMB), around 5.43% of its 13F portfolio. Consonance Capital Management is also relatively very bullish on the stock, designating 4.44 percent of its 13F equity portfolio to ASMB.
Consequently, key money managers have been driving this bullishness. Samsara BioCapital, managed by Srini Akkaraju and Michael Dybbs, assembled the biggest position in Assembly Biosciences Inc (NASDAQ:ASMB). Samsara BioCapital had $0.7 million invested in the company at the end of the quarter. Brian Ashford-Russell and Tim Woolley’s Polar Capital also initiated a $0.3 million position during the quarter. The only other fund with a brand new ASMB position is Greg Eisner’s Engineers Gate Manager.
Let’s check out hedge fund activity in other stocks similar to Assembly Biosciences Inc (NASDAQ:ASMB). We will take a look at NetGear, Inc. (NASDAQ:NTGR), Azure Power Global Limited (NYSE:AZRE), SpartanNash Company (NASDAQ:SPTN), Great Western Bancorp Inc (NYSE:GWB), DHT Holdings Inc (NYSE:DHT), Cellectis SA (NASDAQ:CLLS), and Keros Therapeutics, Inc. (NASDAQ:KROS). All of these stocks’ market caps are closest to ASMB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| NTGR | 19 | 38794 | 6 |
| AZRE | 3 | 10863 | -1 |
| SPTN | 15 | 62843 | 1 |
| GWB | 18 | 27559 | 8 |
| DHT | 18 | 146575 | -16 |
| CLLS | 13 | 34700 | 3 |
| KROS | 11 | 191729 | 11 |
| Average | 13.9 | 73295 | 1.7 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 13.9 hedge funds with bullish positions and the average amount invested in these stocks was $73 million. That figure was $293 million in ASMB’s case. NetGear, Inc. (NASDAQ:NTGR) is the most popular stock in this table. On the other hand Azure Power Global Limited (NYSE:AZRE) is the least popular one with only 3 bullish hedge fund positions. Assembly Biosciences Inc (NASDAQ:ASMB) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for ASMB is 83.1. 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 10 most popular stocks among hedge funds returned 41.4% in 2019 and outperformed the S&P 500 ETF (SPY) by 10.1 percentage points. These stocks gained 24.8% in 2020 through the end of September and beat the market by 19.3 percentage points. Unfortunately ASMB wasn’t nearly as popular as these 10 stocks and hedge funds that were betting on ASMB were disappointed as the stock returned -29.5% in Q3 and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 10 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
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Disclosure: None. This article was originally published at Insider Monkey.
