Is NTLA Stock A Buy or Sell?

In this article you are going to find out whether hedge funds think Intellia Therapeutics, Inc. (NASDAQ:NTLA) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the consensus picks among hedge fund investors have historically outperformed the market after adjusting for known risk attributes. It’s not surprising given that hedge funds have access to better information and more resources to predict the winners in the stock market.

Is NTLA stock a buy? The best stock pickers were buying. The number of long hedge fund positions rose by 15 in recent months. Intellia Therapeutics, Inc. (NASDAQ:NTLA) was in 30 hedge funds’ portfolios at the end of the fourth quarter of 2020. The all time high for this statistic was previously 17. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that NTLA isn’t among the 30 most popular stocks among hedge funds (click for Q4 rankings).

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 S&P 500 ETFs by more than 124 percentage points since March 2017 (see the details here).

David Siegel of Two Sigma Advisors

At Insider Monkey we leave no stone unturned when looking for the next great investment idea. For example, we heard that billionaire Peter Thiel is backing this psychedelic-drug startup. So, we are taking a closer look at this space. We go through lists like the 10 best biotech stocks under $10 to identify the next stock with 10x upside potential. 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. Now let’s take a glance at the fresh hedge fund action surrounding Intellia Therapeutics, Inc. (NASDAQ:NTLA).

Do Hedge Funds Think NTLA Is A Good Stock To Buy Now?

At the end of the fourth quarter, a total of 30 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 100% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards NTLA over the last 22 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.

Among these funds, ARK Investment Management held the most valuable stake in Intellia Therapeutics, Inc. (NASDAQ:NTLA), which was worth $608.8 million at the end of the fourth quarter. On the second spot was Citadel Investment Group which amassed $61.4 million worth of shares. Two Sigma Advisors, Holocene Advisors, and D E Shaw 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 Burrage Capital Management allocated the biggest weight to Intellia Therapeutics, Inc. (NASDAQ:NTLA), around 2.66% of its 13F portfolio. ARK Investment Management is also relatively very bullish on the stock, setting aside 1.62 percent of its 13F equity portfolio to NTLA.

With a general bullishness amongst the heavyweights, key hedge funds were breaking ground themselves. Holocene Advisors, managed by Brandon Haley, established the most outsized position in Intellia Therapeutics, Inc. (NASDAQ:NTLA). Holocene Advisors had $24.4 million invested in the company at the end of the quarter. Farallon Capital also made a $12.2 million investment in the stock during the quarter. The other funds with brand new NTLA positions are James Crichton’s Hitchwood Capital Management, Dmitry Balyasny’s Balyasny Asset Management, and Christiana Goh Bardon’s Burrage Capital Management.

Let’s check out hedge fund activity in other stocks – not necessarily in the same industry as Intellia Therapeutics, Inc. (NASDAQ:NTLA) but similarly valued. These stocks are Methanex Corporation (NASDAQ:MEOH), EQT Corporation (NYSE:EQT), Sterling Bancorp (NYSE:STL), Visteon Corp (NYSE:VC), Macy’s, Inc. (NYSE:M), Jamf Holding Corp. (NASDAQ:JAMF), and Norbord Inc. (NYSE:OSB). This group of stocks’ market valuations match NTLA’s market valuation.

View table here if you experience formatting issues.

As you can see these stocks had an average of 24.6 hedge funds with bullish positions and the average amount invested in these stocks was $637 million. That figure was $835 million in NTLA’s case. EQT Corporation (NYSE:EQT) is the most popular stock in this table. On the other hand Methanex Corporation (NASDAQ:MEOH) is the least popular one with only 12 bullish hedge fund positions. Intellia Therapeutics, Inc. (NASDAQ:NTLA) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for NTLA is 69. 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. Our calculations showed that top 30 most popular stocks among hedge funds returned 81.2% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 26 percentage points. These stocks gained 12.2% in 2021 through April 12th and still beat the market by 1.5 percentage points. Hedge funds were also right about betting on NTLA as the stock returned 25.8% since the end of Q4 (through 4/12) and outperformed the market. Hedge funds were rewarded for their relative bullishness.

Disclosure: None. This article was originally published at Insider Monkey.

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