The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 817 13F filings submitted by hedge funds and prominent investors. These filings show these funds’ portfolio positions as of September 30th, 2020. In this article we are going to take a look at smart money sentiment towards Twist Bioscience Corporation (NASDAQ:TWST).
Is TWST a good stock to buy now? Prominent investors were taking a bullish view. The number of long hedge fund positions advanced by 2 in recent months. Twist Bioscience Corporation (NASDAQ:TWST) was in 21 hedge funds’ portfolios at the end of the third quarter of 2020. The all time high for this statistic is 19. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that TWST 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). There were 19 hedge funds in our database with TWST positions at the end of the second quarter.
Video: Watch our video about the top 5 most popular hedge fund stocks.
In the financial world there are a large number of tools investors have at their disposal to grade stocks. A pair of the most under-the-radar tools are hedge fund and insider trading indicators. We have shown that, historically, those who follow the top picks of the best fund managers can outperform the broader indices by a solid amount. Insider Monkey’s monthly stock picks returned 113% since March 2017 and outperformed the S&P 500 ETFs by more than 66 percentage points. Our short strategy outperformed the S&P 500 short ETFs by 20 percentage points annually (see the details here). That’s why we believe hedge fund sentiment is a useful indicator that investors should pay attention to.
Minhua Zhang of Weld 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. With all of this in mind we’re going to take a glance at the latest hedge fund action encompassing Twist Bioscience Corporation (NASDAQ:TWST).
Do Hedge Funds Think TWST Is A Good Stock To Buy Now?
At the end of September, a total of 21 of the hedge funds tracked by Insider Monkey were bullish on this stock, a change of 11% from one quarter earlier. Below, you can check out the change in hedge fund sentiment towards TWST over the last 21 quarters. So, let’s examine which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
Of the funds tracked by Insider Monkey, Nicholas J. Pritzker’s Tao Capital has the largest position in Twist Bioscience Corporation (NASDAQ:TWST), worth close to $93.6 million, corresponding to 30.8% of its total 13F portfolio. Sitting at the No. 2 spot is Casdin Capital, managed by Eli Casdin, which holds a $76 million position; 3.4% of its 13F portfolio is allocated to the company. Remaining professional money managers that are bullish encompass D. E. Shaw’s D E Shaw, Paul Marshall and Ian Wace’s Marshall Wace LLP and Bihua Chen’s Cormorant Asset Management. In terms of the portfolio weights assigned to each position Tao Capital allocated the biggest weight to Twist Bioscience Corporation (NASDAQ:TWST), around 30.81% of its 13F portfolio. Casdin Capital is also relatively very bullish on the stock, designating 3.4 percent of its 13F equity portfolio to TWST.
Consequently, key hedge funds were leading the bulls’ herd. Intrinsic Edge Capital, managed by Mark Coe, assembled the most valuable position in Twist Bioscience Corporation (NASDAQ:TWST). Intrinsic Edge Capital had $8.6 million invested in the company at the end of the quarter. Noam Gottesman’s GLG Partners also made a $1.5 million investment in the stock during the quarter. The other funds with brand new TWST positions are Cliff Asness’s AQR Capital Management and Minhua Zhang’s Weld Capital Management.
Let’s check out hedge fund activity in other stocks similar to Twist Bioscience Corporation (NASDAQ:TWST). These stocks are Stantec Inc. (NYSE:STN), Iridium Communications Inc. (NASDAQ:IRDM), TG Therapeutics Inc (NASDAQ:TGTX), Global Blood Therapeutics Inc (NASDAQ:GBT), Parsons Corporation (NYSE:PSN), Vertex, Inc. (NASDAQ:VERX), and Watts Water Technologies Inc (NYSE:WTS). All of these stocks’ market caps are closest to TWST’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| STN | 8 | 82259 | 3 |
| IRDM | 15 | 135802 | -4 |
| TGTX | 30 | 718643 | -4 |
| GBT | 29 | 662293 | -2 |
| PSN | 16 | 84915 | 1 |
| VERX | 15 | 97006 | 15 |
| WTS | 18 | 277904 | -7 |
| Average | 18.7 | 294117 | 0.3 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 18.7 hedge funds with bullish positions and the average amount invested in these stocks was $294 million. That figure was $408 million in TWST’s case. TG Therapeutics Inc (NASDAQ:TGTX) is the most popular stock in this table. On the other hand Stantec Inc. (NYSE:STN) is the least popular one with only 8 bullish hedge fund positions. Twist Bioscience Corporation (NASDAQ:TWST) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for TWST is 66.5. 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 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 30.7% in 2020 through December 14th and still beat the market by 15.8 percentage points. Hedge funds were also right about betting on TWST as the stock returned 84.6% since the end of Q3 (through 12/14) and outperformed the market. Hedge funds were rewarded for their relative bullishness.
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Disclosure: None. This article was originally published at Insider Monkey.
