At Insider Monkey we track the activity of some of the best-performing hedge funds like Appaloosa Management, Baupost, and Third Point because we determined that some of the stocks that they are collectively bullish on can help us generate returns above the broader indices. Out of thousands of stocks that hedge funds invest in, small-caps can provide the best returns over the long term due to the fact that these companies are less efficiently priced and are usually under the radars of mass-media, analysts and dumb money. This is why we follow the smart money moves in the small-cap space.
Assembly Biosciences Inc (NASDAQ:ASMB) has seen a decrease in hedge fund sentiment of late. ASMB was in 10 hedge funds’ portfolios at the end of the third quarter of 2016. There were 12 hedge funds in our database with ASMB positions at the end of the previous quarter. 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 decline in popularity but it may still be more popular than similarly priced stocks. That’s why at the end of this article we will examine companies such as The McClatchy Company (NYSE:MNI), Bioamber Inc (NYSE:BIOA), and CUI Global Inc (NASDAQ:CUI) to gather more data points.
Follow Assembly Biosciences Inc. (NASDAQ:ASMB)
Follow Assembly Biosciences Inc. (NASDAQ:ASMB)
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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Keeping this in mind, let’s go over the key action encompassing Assembly Biosciences Inc (NASDAQ:ASMB).
How are hedge funds trading Assembly Biosciences Inc (NASDAQ:ASMB)?
Heading into the fourth quarter of 2016, a total of 10 of the hedge funds tracked by Insider Monkey were bullish on this stock, a 17% decline from one quarter earlier. On the other hand, there were a total of 11 hedge funds with a bullish position in ASMB at the beginning of this year. So, let’s check out 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, EcoR1 Capital, led by Oleg Nodelman, holds the largest position in Assembly Biosciences Inc (NASDAQ:ASMB). EcoR1 Capital has a $21.2 million position in the stock, comprising 6.5% of its 13F portfolio. The second most bullish fund manager is OrbiMed Advisors, led by Samuel Isaly, holding a $10.1 million position. Other hedge funds and institutional investors with similar optimism contain Joseph Edelman’s Perceptive Advisors, Daniel Gold’s QVT Financial and Kris Jenner, Gordon Bussard, Graham McPhail’s Rock Springs Capital Management. 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.
We already know that not all hedge funds are bullish on the stock and some hedge funds actually dumped their positions entirely. Intriguingly, John Fichthorn’s Dialectic Capital Management dumped the biggest position of all the hedgies monitored by Insider Monkey, worth an estimated $0.2 million in stock. Ben Levine, Andrew Manuel and Stefan Renold’s fund, LMR Partners, also cut its stock, about $0.1 million worth.
Let’s now take a look at hedge fund activity in other stocks similar to Assembly Biosciences Inc (NASDAQ:ASMB). These stocks are The McClatchy Company (NYSE:MNI), Bioamber Inc (NYSE:BIOA), CUI Global Inc (NASDAQ:CUI), and Aware, Inc. (NASDAQ:AWRE). All of these stocks’ market caps are similar to ASMB’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| MNI | 3 | 11485 | -1 |
| BIOA | 9 | 5797 | 0 |
| CUI | 1 | 2085 | -4 |
| AWRE | 5 | 12460 | 5 |
As you can see these stocks had an average of 5 hedge funds with bullish positions and the average amount invested in these stocks was $8 million. That figure was $52 million in ASMB’s case. Bioamber Inc (NYSE:BIOA) is the most popular stock in this table. On the other hand CUI Global Inc (NASDAQ:CUI) is the least popular one with only 1 bullish hedge fund positions. Compared to these stocks Assembly Biosciences Inc (NASDAQ:ASMB) is more popular among hedge funds. Considering that hedge funds are fond of this stock in relation to its market cap peers, the stock was still a “buy” at the end of September.
Disclosure: None
