Was The Smart Money Right About CRISPR Therapeutics AG (CRSP)?

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. We at Insider Monkey have plowed through 867 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 September 30th. Hedge funds’ consensus stock picks performed spectacularly over the last 3 years, but 2022 hasn’t been kind to hedge funds. In this article we look at how hedge funds traded CRISPR Therapeutics AG (NASDAQ:CRSP) and determine whether the smart money was really smart about this stock.

Is CRISPR Therapeutics AG (NASDAQ:CRSP) a buy right now? The smart money was betting on the stock. The number of bullish hedge fund bets rose by 9 recently. CRISPR Therapeutics AG (NASDAQ:CRSP) was in 43 hedge funds’ portfolios at the end of September. The all time high for this statistic was previously 34. This means the bullish number of hedge fund positions in this stock currently sits at its all time high. Our calculations also showed that CRSP isn’t among the 30 most popular stocks among hedge funds (click for Q3 rankings).

Matthew Hulsizer of PEAK6 Capital

At Insider Monkey, we scour multiple sources to uncover the next great investment idea. For example, lithium prices have more than doubled over the past year, so we go through lists like the 10 best EV stocks to pick the next Tesla that will deliver a 10x return. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. Now we’re going to take a peek at the key hedge fund action regarding CRISPR Therapeutics AG (NASDAQ:CRSP).

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

At the end of September, a total of 43 of the hedge funds tracked by Insider Monkey were long this stock, a change of 26% from the second quarter of 2021. The graph below displays the number of hedge funds with bullish position in CRSP over the last 25 quarters. With the smart money’s sentiment swirling, there exists a select group of notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

According to publicly available hedge fund and institutional investor holdings data compiled by Insider Monkey, Catherine D. Wood’s ARK Investment Management has the number one position in CRISPR Therapeutics AG (NASDAQ:CRSP), worth close to $849.1 million, corresponding to 2% of its total 13F portfolio. On ARK Investment Management’s heels is OrbiMed Advisors, with a $68.6 million position; 0.8% of its 13F portfolio is allocated to the stock. Remaining professional money managers that hold long positions include Steven Boyd’s Armistice Capital, and Christopher R. Hansen’s Valiant Capital. In terms of the portfolio weights assigned to each position Valiant Capital allocated the biggest weight to CRISPR Therapeutics AG (NASDAQ:CRSP), around 3.33% of its 13F portfolio. ARK Investment Management is also relatively very bullish on the stock, earmarking 2.04 percent of its 13F equity portfolio to CRSP.

Now, some big names were leading the bulls’ herd. Marshall Wace LLP, managed by Paul Marshall and Ian Wace, initiated the largest position in CRISPR Therapeutics AG (NASDAQ:CRSP). Marshall Wace LLP had $28.6 million invested in the company at the end of the quarter. Matthew Hulsizer’s PEAK6 Capital Management also initiated a $5.2 million position during the quarter. The other funds with new positions in the stock are Noam Gottesman’s GLG Partners, Paul Tudor Jones’s Tudor Investment Corp, and Mika Toikka’s AlphaCrest Capital Management.

Let’s go over hedge fund activity in other stocks similar to CRISPR Therapeutics AG (NASDAQ:CRSP). These stocks are Jabil Inc. (NYSE:JBL), Vertiv Holdings Co (NYSE:VRT), Knight-Swift Transportation Holdings Inc. (NYSE:KNX), Hyatt Hotels Corporation (NYSE:H), IPG Photonics Corporation (NASDAQ:IPGP), DXC Technology Company (NYSE:DXC), and Bright Horizons Family Solutions Inc (NYSE:BFAM). This group of stocks’ market values resemble CRSP’s market value.

View table here if you experience formatting issues.

As you can see these stocks had an average of 28.6 hedge funds with bullish positions and the average amount invested in these stocks was $539 million. That figure was $1216 million in CRSP’s case. Hyatt Hotels Corporation (NYSE:H) is the most popular stock in this table. On the other hand Knight-Swift Transportation Holdings Inc. (NYSE:KNX) is the least popular one with only 21 bullish hedge fund positions. Compared to these stocks CRISPR Therapeutics AG (NASDAQ:CRSP) is more popular among hedge funds. Our overall hedge fund sentiment score for CRSP is 90. 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 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 29.6% in 2021 and still beat the market by 3.6 percentage points. Unfortunately, CRSP wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on CRSP were disappointed as the stock returned -43% since the end of the third quarter (through 1/31) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as all of these stocks already outperformed the market since 2019.

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

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