Our extensive research has shown that imitating the smart money can generate significant returns for retail investors, which is why we track nearly 817 active prominent money managers and analyze their quarterly 13F filings. The stocks that are heavily bought by hedge funds historically outperformed the market, though there is no shortage of high profile failures like hedge funds’ 2018 losses in Facebook and Apple. Let’s take a closer look at what the funds we track think about Prevail Therapeutics Inc. (NASDAQ:PRVL) in this article.
Is PRVL a good stock to buy now? Prominent investors were buying. The number of long hedge fund positions inched up by 1 lately. Prevail Therapeutics Inc. (NASDAQ:PRVL) was in 12 hedge funds’ portfolios at the end of September. The all time high for this statistics is 12. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that PRVL isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings and see the video for a quick look at the top 5 stocks).
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are several metrics stock market investors put to use to size up publicly traded companies. A duo of the best metrics are hedge fund and insider trading activity. Our experts have shown that, historically, those who follow the top picks of the elite fund managers can outpace the broader indices by a significant margin (see the details here).
Peter Kolchinsky of RA 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 recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 15 best blue chip stocks 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. Now we’re going to go over the new hedge fund action surrounding Prevail Therapeutics Inc. (NASDAQ:PRVL).
Do Hedge Funds Think PRVL Is A Good Stock To Buy Now?
At the end of September, a total of 12 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 9% from the previous quarter. The graph below displays the number of hedge funds with bullish position in PRVL over the last 21 quarters. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
The largest stake in Prevail Therapeutics Inc. (NASDAQ:PRVL) was held by OrbiMed Advisors, which reported holding $140.7 million worth of stock at the end of September. It was followed by Citadel Investment Group with a $24.6 million position. Other investors bullish on the company included RA Capital Management, Adage Capital Management, and Woodline Partners. In terms of the portfolio weights assigned to each position OrbiMed Advisors allocated the biggest weight to Prevail Therapeutics Inc. (NASDAQ:PRVL), around 1.78% of its 13F portfolio. RA Capital Management is also relatively very bullish on the stock, designating 0.36 percent of its 13F equity portfolio to PRVL.
Now, some big names were leading the bulls’ herd. Point72 Asset Management, managed by Steve Cohen, established the most valuable position in Prevail Therapeutics Inc. (NASDAQ:PRVL). Point72 Asset Management had $1.6 million invested in the company at the end of the quarter. Charles Davidson and Joseph Jacobs’s Wexford Capital also made a $0.4 million investment in the stock during the quarter. The only other fund with a new position in the stock is John Overdeck and David Siegel’s Two Sigma Advisors.
Let’s go over hedge fund activity in other stocks – not necessarily in the same industry as Prevail Therapeutics Inc. (NASDAQ:PRVL) but similarly valued. We will take a look at Intelligent Systems Corporation (NYSE:INS), Daseke, Inc. (NASDAQ:DSKE), ANI Pharmaceuticals Inc (NASDAQ:ANIP), Hemisphere Media Group Inc (NASDAQ:HMTV), Luxfer Holdings PLC (NYSE:LXFR), International General Insurance Holdings Ltd. (NASDAQ:IGIC), and Comtech Telecommunications Corp. (NASDAQ:CMTL). This group of stocks’ market caps are similar to PRVL’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| INS | 8 | 47979 | 0 |
| DSKE | 11 | 15708 | 2 |
| ANIP | 8 | 12473 | -2 |
| HMTV | 6 | 24902 | -2 |
| LXFR | 12 | 71054 | 1 |
| IGIC | 9 | 11712 | 0 |
| CMTL | 12 | 36285 | -1 |
| Average | 9.4 | 31445 | -0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 9.4 hedge funds with bullish positions and the average amount invested in these stocks was $31 million. That figure was $206 million in PRVL’s case. Luxfer Holdings PLC (NYSE:LXFR) is the most popular stock in this table. On the other hand Hemisphere Media Group Inc (NASDAQ:HMTV) is the least popular one with only 6 bullish hedge fund positions. Prevail Therapeutics Inc. (NASDAQ:PRVL) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for PRVL is 86. 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 20 most popular stocks among hedge funds returned 41.3% in 2019 and outperformed the S&P 500 ETF (SPY) by 10 percentage points. These stocks gained 32.9% in 2020 through December 8th and beat the market again by 16.2 percentage points. Unfortunately PRVL wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on PRVL were disappointed as the stock returned 7.5% since the end of September (through 12/8) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Follow Prevail Therapeutics Inc.
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Disclosure: None. This article was originally published at Insider Monkey.
